The rise China and India change the way the world economy

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Introduction:

Over the past three decades the global economic power has been slowly shifting with previously developing countries now rising to power and reducing U.S.'s global hegemony. The rising of countries such as India, China, Indonesia and Korea have been a cause of great debate regarding the effects that this shift will have on the way that the world economy is been governed (Lehman, 2009). There have been speculations on how the current institutional framework in the global economy will be affected with the National intelligence Council projecting that "by 2025 the international systems will be a global multipolar" system with several world powers (National Intelligence Council, 2008:1). The paper analyses on whether the rise of developing countries like China and India can change the way the world economy is being governed.

The rise of the emerging economies:

The rise of emerging economies such as India, china and Brazil as important global power house has created political waves across the United States and Europe. Not only are the economic weights of these emerging economies being felt throughout the world but they are also becoming more assertive in the international and transnational institutions such as the World Trade Organization, (WTO), World Bank and the International monetary Fund (IMF). The rise of these developing countries is said to herald a global political and economic order transformation that is as important as that "brought by industrial revolution" (Stewart, 2010).

Globalization reflects the emergence of countries such as China and India as modern powerful economic forces. This rise has caused tension between the nation-centric class interests and the newly developed economies, the relationships they foster and the transnational accumulation of wealth approach that they are adopting (Brendon, 2010). It is this gradual shift and the resulting tensions and contradictions that grace the current world situation. The conflict pits rising forms of globalize capital against the dropping forms of national production. This is because the older international system was mainly focused on building national wealth and markets unlike the current globalist accumulation model which is based in creating wealth in other viable markets through foreign direct investment, cross border mergers, free flow of global capital, global labor stratification, and common regulations developed by multilateral institutions (Schememam, 2011: 2). This changing global environment is based on the revolution of the Information technology that has enabled more integrated quality production at a global scale.

The rise of developing countries such as China and India has been mainly due globalization, increased efficient production techniques and the sheer size of their populations. With a population of 1.3 billion people in china and 1.1 billion people in India, these two nations are said to be the first and second most populous countries in the world. Over the past three decades these two countries have enjoyed tremendous economic growth rates with China having an annual growth rate of about 9.8% per annum. Indeed the International Monetary Fund (IMF) has projected lately that by 2016 China economy will have surpassed that of the United States of America (Weisbrot, 2011:1). The international system is set to change due to this rise of the developing world, especially the dramatic shift of wealth from the west to the East. The recent global financial volatility has been said to be a key factor in accelerating this change in global governance, with possible risks in the future including nuclear arms race in the Middle East, resource constraints in energy, water and food and great worries in the climatic changes ...