NZNTV

The recent G7 summit in Hiroshima culminated in an impressive show of unity over the war in Ukraine and China’s expansionism. But are analysts and commentators right to cite the group’s declining share of global GDP as evidence of its dwindling power and influence?

China, in particular, has capitalized on this trend in recent years to proclaim the superiority of its one-party system over the “decadence” of wealthy liberal democracies. Meanwhile, the G20 – which, along with the G7 countries, includes China, India, Brazil, South Africa, Indonesia, and eight other countries – has carved out a prominent role on the global stage.

But the evidence for the G7’s decline is hardly overwhelming. While the G20 countries comprise roughly two-thirds of the world’s population and account for 85% of global GDP, the G7 countries alone account for 44% of the world economy despite containing only about 10% of its population.

To be sure, the G20’s economic performance has improved dramatically over the past few years, as billions of individuals in developing countries have increasingly participated in a global economy whose rulebook was primarily authored by the West. As Western democracies became more open to trade following the end of the Cold War, developing countries gained access to huge markets for their often lower-priced goods. For example, Chinese exports to the United States increased from $3.86 billion in 1985 to $537 billion in 2022.

Even so, given that the prosperity of affluent democracies has been a driving force behind developing countries’ success, it would be misguided to interpret this trend as a sign of the West’s decline. Similarly, while it has become increasingly common to predict the end of America’s economic dominance, history suggests that the US will overcome its current problems, as it has consistently done in the past…(more)

By Chris Patten*