“The United States and China will both control about 22-23% of the global economy,” Michael Enright said in a panel with Northeastern experts.
Western Europe is being overtaken by China, but that doesn’t mean China is destined to dominate the global economy, says Michael Enright, the Pierre Shueiri Family Professor of Global Business at Northeastern University.
“If the predictions my group is making come true, both the United States and China will control about 22 to 23 percent of the global economy,” Enright said in a December 15, 2018, East He spoke at a discussion on the global economy that brought together Northeastern experts at the Village. Wednesday at the Boston campus.
Gone are the days when the United States and Western Europe controlled more than 50% of the world economy and “were able to pretty much dictate the rules of international trade and investment,” Enright said.
He acknowledged that predicting the future is difficult.
“We don’t know whether we will have a unified investment and trade regime under a rules-based system, or whether we will have a fragmented, chaotic and authoritarian system,” Enright said. “The US and China will be the most important players, but it’s the decisions of the EU, India and some other countries that could really shift the balance in some way.”
Enright said China is rising despite its structural problems.
“China’s economy is slowing down,” he said. “The real estate bubble is deflating. The working-age population is now shrinking. The effects of the coronavirus are still reverberating through the economy. Economic nationalism is on the rise. Tensions between East and West are increasing. , China’s own priorities are shifting from major economic growth to increasing technological self-sufficiency.
“China has the potential to become the world’s largest economy, but current trends suggest that China will never become the dominant economy that many analysts predicted just a few years ago,” Enright said. This suggests that it will not happen.”
Joining Northeastern experts at the wide-ranging event ‘Beyond Boundaries: Exploring the Future of Global Business’ was Devika Burchandani, Global CEO of international advertising, PR and consulting firm Ogilvy. David Vitti, Vice President and Chief Procurement Officer, Bose;
Mr. Vitti agreed with Mr. Enright that the Chinese market is “soft,” but added, “It’s a great time to do business in China.”
Vitti, who used to visit China three or four times a year, said, “This is my first time returning to China since the outbreak of the new coronavirus infection.” “And I was very impressed with all the infrastructure investments they’ve made. They’ve been very busy during the corona period. They’ve been investing in automation. They’ve been investing in AI. Their universities are much better (than those in some Southeast Asian countries).
Ravi Ramamurti, founder and director of Northeastern University’s Center for Emerging Markets and the university’s distinguished professor of international business and strategy, said the global economy is at a tipping point. He predicted that global population growth could slow to 25% over the next 50 years and that governments would increasingly protect national economies.
“There are already signs that that is starting to happen, and that is creating a lot of uncertainty about what the future holds,” Ramamurti said, predicting fragmentation in global markets. “We are entering what some people call a multipolar world, and it will be unlike anything we have seen before.”
Samina Karim, Northeast professor and chair of the Entrepreneurship and Innovation Group, said competition would intensify as more countries become increasingly active in the global economy.
“We are not only facing competition from these markets, but also the market share we want to capture in those markets,” Karim said, adding that geopolitical tensions further complicate business relationships. He added that it would be. “As companies face greater uncertainty and risk due to these political tensions, we expect to see a decline in foreign direct investment in certain regions of the world and countries that could deter cross-border acquisitions. ”
Fabricius Somogyi, assistant professor of finance at Northeastern, said the shift in perspective is prompting the search for an alternative currency to the US dollar. One possibility could be an increased reliance on the euro, which is based on a large financial sector.
“What are the other options?” Somogyi said. “You can also look at developing countries, especially China. The trouble here is that the very policies that nurture and strengthen China’s economy and protect it from the spillover effects of U.S. monetary policy are It is also the policy that prevents the US dollar from becoming a true competitor.
Ravi Sarathy, a professor at Northeastern who specializes in international business and strategy, said yet another option could emerge from cryptocurrencies that are not tied to governments. At the same time, the government insists it wants to maintain control over the money supply and monetary policy, it added.
“What is the backbone of this globalization?” Sarathy said. “I think at the heart of this is the network.”
Even with all the digital innovations transforming the global economy, one thing remains constant, Burchandani said.
“What hasn’t changed is human motivation,” she says.
That revelation was backed up by her inspiring story of growing up in India dreaming of fulfilling herself at the highest level. Burchandani became the first woman of color to run a global agency network, leading the transition of advertising from traditional media to social media.
In this time of fascinating and frightening global change, Burchandani offers a timeless formula for success.
“Two things are indisputable: the pursuit of greatness and the pursuit of greatness,” she said. “That’s our vision. That’s our mission.”
world news
Recent stories
:where(:not(.alignleft):not(.alignright):not(.alignfull)){max-width:600px;margin-left:auto ! important;margin-right:auto ! important;}.wp-container -core-group-is-layout-2 > .alignwide{max-width:1280px;}.wp-container-core-group-is-layout-2 .alignfull{max-width:none;}.wp-container- core-group-is-layout-2 > *{margin-block-start:0;margin-block-end:0;}.wp-container-core-group-is-layout-2 > * + *{margin- block-start:var(–wp–preset–spacing–40);margin-block-end:0;}.wp-block-gallery.wp-block-gallery-5{–wp–style –unstable-gallery-gap:var( –wp–style–gallery-gap-default, var( –gallery-block–gutter-size, var( –wp–style–block-gap , 0.5em ) ) );gap:var( –wp–style–gallery-gap-default, var( –gallery-block–gutter-size, var( –wp–style–block- Gap, 0.5em ) ) );}.wp-container-nunews-colterner-is-layout-1{flex-direction:column;align-items:stretch;}.wp-container-nunews-colterner-is-layout- 2{flex-direction:column;align-items:stretch;}.wp-container-core-group-is-layout-4 > :where(:not(.alignleft):not(.alignright):not(.alignfull )){max-width:832px;margin-left:auto ! important;margin-right:auto ! important;}.wp-container-core-group-is-layout-4 > .alignwide{max-width:832px; }.wp-container-core-group-is-layout-4 .alignfull{max-width:none;}.wp-container-core-post-content-is-layout-1 > :where(:not(.alignleft ):not(.alignright):not(.alignfull)){margin-left:auto ! important;margin-right:auto ! important;}.wp-container-core-post-content-is-layout-1 .alignfull {max-width:none;} ))>
