The Shift from West to East: A New Global Economic Order
Over the past two decades, there has been a significant transformation in the global economic landscape. Economic strength, trade flows, technological leadership, and even consumer demand have been gradually shifting from the West to the East. This shift is not only redrawing economic maps but also raising critical questions about cooperation, competition, and inclusion in a multipolar world. Arno van Niekerk, a lecturer in economics and finance, explores these issues in his new book, West to East: A New Global Economy in the Making.
Indicators of the Shift
One of the most notable indicators of this shift is the growing economic influence of the Brics countries—comprising Brazil, Russia, India, China, and South Africa. These nations, particularly China and India, have overtaken the G7 countries in their share of global GDP. According to data, the Brics’ contribution to global GDP rose from 21.37% in 2000 to 35.43% in 2024, while the G7’s share fell from 43.28% in 2000 to 29.64% in 2024. This marks a historic turning point, as economic leadership that was once concentrated in the West is now decisively shifting towards emerging economies.
Another strong indicator is the change in global shares of trade. Specifically, exports have seen a significant shift. Data shows that the Brics+ (which includes 11 countries) captured 28% of world exports in 2024, closing in on the G7’s 32%. This rebalancing of global trade dynamics has wide-ranging consequences for international business. It means that countries like China and India are not just expanding in scale but are also integrating effectively into global value chains, improving productivity, and raising living standards.
As shown in Figure 2, the share of global merchandise exports of the G7 countries fell from 45.1% in 2000 to 28.9% in 2023. For their part, the Brics+ share rose from 10.7% in 2000 to 23.3% in 2023.
Other indicators include:
- Over two-thirds of global foreign exchange reserves are held in Asia, particularly in China, Japan, India, and South Korea.
- China has displaced Western dominance in foreign direct investment in developing regions through its Belt and Road Initiative.
- Asia now accounts for more than half of the global middle class, driving demand growth.
- China, India, South Korea, and Japan have become leaders in financial technology, artificial intelligence, and 5G adoption.
Implications for Economic Cooperation
This shift raises important questions about economic cooperation. Countries in both the East and the West need to make more intentional efforts to address growing geoeconomic tensions and move towards a shared vision for sustainable economic progress. Such cooperation should go beyond traditional trade and investment agreements and focus on reducing inequalities, strengthening resilience, and embedding sustainability.
Van Niekerk identifies five main areas for co-operative initiatives:
Coordinated Policy Frameworks
- Tax co-operation in the form of global minimum corporate taxes to ensure fair revenue for social investment.
- Harmonise labour and social protections through common standards to prevent exploitation.
- Align sustainable development by embedding the Sustainable Development Goals, the Paris Agreement targets, and human rights principles into trade and financial agreements.
Inclusive Trade and Investment
- Fair trade agreements to ensure that market access benefits small producers, women, and marginalised communities.
- Establish regional value chains that support developing countries in upgrading within global value chains.
- Design co-operative frameworks for technology transfer, especially for sharing green and digital technologies at affordable costs.
Financial Co-operation
- Innovative financing mechanisms such as green and social bonds, blended finance, and climate funds need to be made accessible to low-income countries.
- Implement co-operative mechanisms for debt relief and restructuring.
- Forge public-private partnerships for inclusion to co-finance social infrastructure, including education, health, and digital access.
Knowledge and Capacity Building
- Joint research platforms are required to enable more collaborative work on climate adaptation, food security, and inclusive digitalisation.
- Increase South-south and triangular co-operation to share experiences and best practices among developing nations with support from multilateral institutions.
- Managed labour mobility schemes through skills partnerships will benefit both sending and receiving countries.
Governance and Multilateral Reform
- Reform global institutions like the World Bank, International Monetary Fund, and World Trade Organization to give developing economies stronger voices in these institutions.
What Should African Countries Be Doing?
China, India, and other leading eastern countries have proven themselves formidable rivals to the West—not just economically, but also militarily and in global governance. Africa occupies a central position and has the opportunity to become a key player in shaping the future of the global economy.
Van Niekerk outlines several recommendations for African countries:
Building a Digital Backbone
- Develop a national broadband and data-centre strategy (public-private), and incentives to attract the building of regional data centres.
- Provide more training in science, technology, engineering, maths, and artificial intelligence. Examples include fast-track bootcamps, ICT in secondary schools, and support for local AI startups.
Securing Investment in Digital Infrastructure
- Governments should continue to secure investment in digital infrastructure, such as fibre optics, 5G networks, and data centres. They could potentially use China’s Digital Silk Road, which promotes affordable tech alternatives.
Prioritising Economic Inclusion and Sustainable Development
- African governments must strategically navigate geopolitical shifts and alliances. They are key spheres of influence in the digital competition between the US and China and ought to use this position to their benefit.
Strategic Geopolitical Navigation
- Use Brics+ membership in a co-ordinated way to advance national interests.
- Foster south-south co-operation by strengthening trade, technological transfer, and financial alliances with other developing countries in Asia, Africa, and Latin America.
- Enhance trade diplomacy and diversify markets to sell more goods and services in Asian, European, and intra-African markets.
- Maximise external investment by securing investments, infrastructure, and digital partnerships from both the US and China.
