Over the past two decades, economic strength, trade flows, technological leadership and even consumer demand have been moving steadily from west to east. This transformation is redrawing economic maps. It is also raising urgent questions about co-operation, competition and inclusion in a multipolar world. Lecturer in economics and finance Arno van Niekerk answers questions about these issues, which he explores in a new book, West to East: A New Global Economy in the Making?
What indicates a shift from west to east?
Brics countries, largely driven by China and India, overtook the G7 countries in their share of global GDP in 2018. As Figure 1 shows, the Brics contribution has grown from 32.33% of global GDP to 35.43% in 2024 (after being at 21.37% in 2000).
Figure 1
The G7’s share decreased to 29.64%, from 43.28% in 2000.
This marks a historic turning point. Economic leadership that was long concentrated in the west has decisively shifted towards emerging economies.
Another strong indicator of the shift is the change in global shares of trade of the G7 and Brics countries. This is particularly true of exports. Data shows that Brics+ (11 countries, including new members) captured 28% of world exports in 2024, closing in on the G7’s 32%.
The rebalancing of global trade dynamics has wide-ranging consequences for international business. It means, especially in the case of China and India, that these economies are doing more than expanding in scale. They 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% (2000) to 23.3% (2023).
Figure 2
There are other indicators too:
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Over two-thirds of global foreign exchange reserves are held in Asia. In particular, in China (US$3 trillion), Japan, India and South Korea. Large reserves indicate that a nation earns more from exports, investment inflows and remittances than it spends on imports and debt payments.
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China has displaced western dominance in foreign direct investment in developing regions. Through its Belt and Road Initiative – involving over 150 countries – it has become the world’s largest source of outbound foreign direct investment.
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Asia now accounts for more than half of the global middle class, driving demand growth. Asia is projected to represent over 50% of global consumer spending. This compares with less than 20% in 1990.
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China, India, South Korea and Japan have become leaders in financial technology, artificial intelligence and 5G adoption. China now files more international patents annually than the US and European Union combined. Specifically, the tech rivalry between the US and China illustrates the change in technological leadership.
What does this shift tell us about economic co-operation?
Countries in both the east and the west need to make more intentional efforts. This is necessary, firstly, to address the growing geoeconomic tension. And secondly to move the world towards a shared vision for sustainable economic progress that benefits all countries.
Such co-operation needs to go beyond traditional trade and investment agreements. It should be deliberately structured to reduce inequalities, strengthen resilience and embed sustainability.
I identify five main areas for co-operative initiatives.
Co-ordinated 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 – so that they don’t just supply raw materials. 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. This will help address unsustainable debt that crowds out social spending. Forge public-private partnerships for inclusion to co-finance social infrastructure. This includes 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. South-south and triangular co-operation should be increased 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: reforming global institutions like the World Bank, International Monetary Fund and World Trade Organization is essential 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 – economically, militarily and in global governance. Africa occupies a central position. It has the opportunity to become a key player in shaping the future of the global economy.
A number of recommendations should serve as priority areas – particularly over the next decade.
The first would include building a digital backbone, and enhancing technology and AI capabilities. These have become core drivers of competitiveness. Without infrastructure and skills, countries are relegated to raw-material suppliers.
Countries need:
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a national broadband and data-centre strategy (public-private), and incentives to attract the building of regional data centres
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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.
Secondly, 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.
Secondly, South Africa and other African countries need to prioritise economic inclusion and sustainable development to fast-track broad-based inclusive economic development. This should be the core driver of their development strategy.
Thirdly, 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. To do this, Africna governments should:
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use Brics+ membership in a co-ordinated way to advance national interests
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foster south-south co-operation by strengthening trade, technological transfer and financial alliances with other developing countries in Asia, Africa and Latin America. More emphasis should be placed on initiatives like the Forum on China-Africa Co-operation.
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enhance trade diplomacy and diversify markets to be able to sell more goods and services in Asian, European and intra-African markets
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maximise external investment by securing investments, infrastructure and digital partnerships from both the US and China. This will position African countries to benefit from the global technology competition.
Arno J. van Niekerk does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
