The Shift to East: China, US Dollar, and the New Multipolar World

Abstract

Geo-economics literature has largely anticipated that the world’s economic center of gravity is shifting East. Yet how quick this seems to be happening, and what geo-political consequences this development is set to generate in the current international system, still raise surprise and concern. After describing in a glimpse what the shift of the economic center of gravity really means, I will make some observations on why the new economic realities have not yet changed the current financial and monetary international order, which sees the US dollar to still be the king. In a pioneering study (2012) on the economic impact of urbanization, the McKinsey Global Institute gauged how the center of gravity, in motion since the year 1AD and likely to move until 2025, is rapidly shifting East, at a speed of 140 kilometers a year, a faster speed than ever before in human history.