Although it has been the topic of conversation in economic and political circles for a number of years, the new world economy is about to become reality. That new economy is one where the world’s centre of economic gravity shifts from being located between North America and Europe to one, in the near future, is centered between Asia and North American, to one eventually that will be centered between China and India. Although, for years we’ve heard predictions that this trend was happening, it’s been hard for most Americans and Europeans to appreciate the economic changes that are on the horizon. The numbers are staggering, and the end result could have a significant impact on the economies and real estate investments in resort areas such as Aspen.
Currently, the United States has the world’s largest economy with a gross domestic product (GDP) of $15.8 trillion. China is in second place with a GDP of roughly $11.4 trillion, Japan is in third with a GDP of slightly less than $5 trillion, and India is in fourth place with a GDP of $4.5 trillion. Germany, Russia, Brazil, the UK, France and Italy make up the remaining top 10 economies in the world. But the big story is the annual growth rate in GDP of the countries like India, China and other Asian countries, versus the GDP growth rate of the United States and the European countries. While the U.S and Eurozone economies are growing at rather anemic rates of 1.0% to 2.0% per year, countries in Asia are growing at astounding rates of 8% to 10% per year. By 2020, just seven years from now, its predicted that China will overtake the U.S. to become the largest economy in the world. This changing world economy becomes even more dramatic when you project these trends out just another thirty-seven more years to 2050. By that time, it’s predicted that India will be the largest economy in the world with a GDP of roughly $86 trillion. China will be in 2nd place with a GDP product of about $80 trillion; and the U.S. will be a distant third with a GDP of only $39 trillion. Japan will have slipped to ninth place and there will not be a single European country in the top 10 world economies. By 2050, it is projected that 64% of the world’s economy will be centered between India and China; and the economies of North America and Europe combined will only make up only 18% of the economic power of the world. In addition to the changing wealth of countries, there will also be a global change in the distribution of wealthy individuals. Currently, there are 63,000 people worldwide with net worth’s of $100 million or more. Of these, 29% are located in South-East Asia, China and Japan, 27% are located in North America, and 22% are located in Western Europe. These numbers are projected to change as well with Asia overtaking the U.S. and Europe in the next few years in terms of having the greatest number of wealthy individuals. It’s hard to predict exactly how this will impact a resort town such as Aspen. But it’s safe to assume that buying patterns will change and that Asian consumers will start driving the demand for the world’s goods and services. For a resort like Aspen, this could mean that a greater number of Asian tourists will start visiting the area. This could likely be followed by a significant increase in the number of Asian buyers buying real estate here in Aspen. Understanding Asian languages, traditions and customs will likely become some of the most important skills for people in the Aspen hospitality, tourist and real estate industries. This all assumes that skiing becomes more popular in Asia and
