Sept 15, 2021
Novelist Robert Louis Stevenson’s maxim that “everyone lives by selling something” applies to nations as much as individuals. The key to understanding the West’s future is therefore predicting what each Western nation can produce that the rest of the world – especially China, but Asia at large – will want to buy. This includes services, which is a critical sector as Western dependence on it is rising. Services include all varieties of tourism: traditional leisure, educational, sporting, conference, medical and cultural. The provision of cross-border digital services, from entertainment to finance, is expected to continue expanding fast for the next few decades; the West will have a key role to play here too.
Western nations will have their work cut out. The East began to take control of the centre of economic gravity by producing goods more cheaply than the West. More recently, it has advanced this shift in trade by achieving a higher quality standard in some areas, too. Part of the success of Eastern companies has been due to using a ‘fifth column’ to break into Western markets where direct access was difficult – that is, US and European multinationals, through which Chinese-manufactured goods bearing Western brands have come to dominate global markets for many goods. Against this backdrop, Western nations will not find it easy to increase their share of the global trade pie.