Managing the U.S. economic decline in relation to the emerging economies in Asia, Latin America and elsewhere, is hard for many Americans to take. But as this article by Financial Times Deutschland columnist Thomas Fricke makes painfully clear, there is no escaping the fact that the old rule, “when America sneezes, the world catches a cold” is fast becoming a relic of a bygone age.
Sure – America is important. It’s just that the financial crisis has dramatically accelerated the trend toward a shift in the global economic balance – a shift away from the United States. Ten years ago, Americans still bought nearly 20 percent of global imports. Now they buy just 12 percent. In the year 2000, the American quota was five times that of China’s. Today the two countries are just 3 tiny percentage points apart.
The year 2009, the year of the U.S. crash, was the first time more newly-registered cars in China than in the land of the Big Three. According to Veronique Riches-Flores, economist with the Socièté Générale in Paris, two years later, the Chinese are registering 50 percent more new cars than the Americans. All in all, however, the Chinese still only spend a fifth of what Americans spend. On the other hand, their spending is growing five times as fast. Result: 2010 was the first time China contributed as much too global growth in consumption as the United States. Ten years ago, the U.S. contribution was five times higher than China’s.
Chinese gains during the recent crisis have also put in perspective the impressiveness of the American economy’s decades of immense influence on the rest of the world. While the U.S. has slipped into a massive recession, China, India, and others, supported by large economic stimulus packages, continued to grow almost unconcerned.
Therefore, agitated knee-jerk reactions and obsessing over each and every U.S. economic indicator is correspondingly absurd. Also absurd is the prediction that the German economic upturn could end because economic growth in the U.S. might slow from 3.5 to 2.5 percent.
Even if this caused German exports to the U.S. to decline by five percent, which is highly unlikely, mathematically, this wouldn’t even amount to 0.1 percent of German economic output. We couldn’t care less.
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