Until 1500, Asia was the center of gravity of the world economy, accounting for roughly two-thirds of global GDP. But in the 18th and 19th centuries, urbanization and industrialization vaulted Europe and the United States to prominence. We are now observing a decisive shift in the balance back toward Asia—at a speed and on a scale never before witnessed. China’s economic transformation resulting from urbanization and industrialization is happening at 100 times the scale of the first country in the world to urbanize—the United Kingdom—and at ten times the speed as below illustration shows.
The recession that has hit the United States and Western Europe particularly hard has accelerated the shift in the global economic balance. From 2007 to 2010, the GDP of large Chinese cities rose from 20 percent of that of large cities in the United States to 37 percent.3 In these three years alone, three more Chinese cities reached megacity status with populations of ten million or more—one new megacity a year. Contrast that with the developed world, whose urban landscape is far more mature.
Between now and 2025, Chicago is the only city in the developed world expected to pass the ten million population mark. But the speed at which the global balance is changing is not simply a China and Asia story. In 2007, the GDP of Latin America’s cities was 26 percent that of their European counterparts; by 2010, that figure had risen to 37 percent.
SOURCE: Angus Maddison; University of Groningen; Resource Revolution: Meeting the world’s energy, materials, food, and water needs. This blog contains excepts from McKinsey Global Institute report on 2011. 1 = Note the chart shows time to increase per capita GDP in PPP terms from $1,300 to $2,600.