Has the global financial crisis produced a New World Order?

Described by Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, as the worst financial crisis in global history, the economic impact of the global financial crisis would have been much worse had it not been for Asia (excluding Japan). In broad terms, the crisis has accelerated the secular emergence of Asia, whereas the US recovery is weak by historical standards and problems in Europe continue. What accounts for this two-tier pattern of world growth? Does this juxtaposition signal a permanent re-ordering of world business – in other words, a New World Order?

► The article first examines the role of the United States and China in the root macroeconomic causes of the global financial crisis, arguing that China's role was more accommodating than causal. ► However, China's role since has been more central. From an analysis of the consequences of the global crisis, it is apparent that Asia, excluding Japan, led by China, has played a major role in sustaining the world economy. ► The aftermath of the crisis has seen Asia ‘come of age’, decnd providing over 60 per cent of global growth since 2009, while the developed countries have languished. ► This two-tier growth path is attributed to the unusual aggression of Asia's countercyclical policy response and to sound banking systems and budgetary positions. ► The article concludes by considering the ‘ever-moving westwards theory of international politics’ and the prediction on present trends that China, having displaced Japan as Number Two, is destined to surpass the United States as Number One before 2020.