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Upstarts ready to rule world's economy
A research firm predicts the West's share of the global economy will be eclipsed by emerging markets this year. No wonder Tim Geithner's in China.

By Paul R. La Monica, CNNMoney.com editor at large
June 3, 2009: 1:12 PM ET

NEW YORK (CNNMoney.com) -- It's only fitting that General Motors, once the embodiment of U.S. economic might, decided to sell its Hummer brand to a Chinese manufacturer after GM (GMGMQ) filed for bankruptcy.

We may not like to admit it, but it's time to get used to this fact: emerging markets such as China and India are quickly becoming the world's new economic powerhouses.

In fact, according to a report from a leading economic research group released earlier this week, emerging market economies may overtake the U.S. and the rest of the Western world this year.

The Centre for Economics and Business Research (CEBR), a London-based economic consulting firm, predicted that the United States, Canada and Europe will contribute 49.4% to the world's total gross domestic product in 2009.

According to the CEBR, this will be the first time since the beginning of the Industrial Revolution in the mid-19th century that non-Western economies produced more than half of the world's GDP.

The CEBR said it had originally predicted emerging markets would make up a bigger portion of the world's economy than the West -- but not until 2015. The firm said the resurgence of China's economy is the main reason why it expects the West's share of global GDP to dip below 50% this year.

"We had expected this to happen, but not quite so soon. The West will have to start to get to grips with the fact that we are no longer dominant and cannot expect to have things our own way," said Douglas McWilliams, chief executive of CEBR, in a statement.

Now the United States is still the world's economic leader. If the global economy were a basketball team, the U.S. is Kobe Bryant. But China is LeBron James (sorry, Cavs fans). In other words, China isn't the champ yet, but it's catching up fast.

Along those lines, CEBR forecast that China will surpass Japan this year as the world's second largest economy. China is already the largest holder of U.S. Treasury notes and the country's second biggest trading partner.

Rest of Article:
http://money.cnn.com/2009/06/03/markets/thebuzz/index.htm?postversion=2009060313