Power is gradually transferring fom West to the East

World manufacturing output Q4 2008 (source FT).

Manufacturing output in the last quarter of 2008 gives us a clear vision of the countries that are suffering most. Several of the major exporting countries of the world are suffering at the end of 2008 a real shock. Countries like Japan, South Korea, Brazil, France and Germany were the worst. Decreases from 30 to 40% in manufacturing output is about stop half the factories in many countries.

Only China has a postive growth in manufacturing. In Fac., 5% is very low for China, but we must not forget that it’s a growth indicator.

Asian economies growth (1990-2009, source: FT).

Notice how the world is changing slowly, less developed countries are suffering less than most Western countries or even the more developed emerging countries. Developed Asian countries like Korea, Singapore, Taiwan or Hong Kong are growing less than countries like China, India, Malaysia, Indonesia, Thailand or Vietnam.

In my opinion, this crisis is gradually transferring the global power from West to East. Forecasts global GDP growth for 2009 is a -2% for rich countries (or indebted) of growth of over 3% for poor countries (with savings). Therefore the average world growth remains close to 0%.

Global world GDP growth (1980-2009, source:FT).