While the U.S., Japan and South Korea are convening at Camp David –  the BRIC countries (Brazil, Russia, India and China) commence a summit of their own today in South Africa – including a state visit by Chinese leader Xi Jinping “which also includes a summit with leaders of the BRICS emerging economies…[the trip] is only Xi’s second international trip this year – a sharp contrast to his globe-trotting days of diplomacy before the coronavirus pandemic.” (1)

Xi journey to South Africa comes at a time when economic woes – including the potential for a “Lehman moment” in the slumping property sector,- are trending towards a full blown crisis in China.  The Chinese people’s waning trust in Xi’s leadership (which is a direct result of the disastrous zero Covid policy) and a lack of consumer confidence are also drivers on the ground in the second largest economy in the world. 

As OODA CEO Matt Devost notes:  “I think with China, in particular, we need to be cognizant of the full spectrum of conventional strategies – and cyber – but also the economic forces at work as well. As the China economy weakens, do economic aspects become more appealing to use as geopolitical levers?”  

Consider the following: 

• De-Dollarization: New Fronts in the Global War Being Waged Against the U.S. Dollar 
• China’s 40-Year Boom Is Over. What Comes Next?:  After 40 years of 10% growth in the Chinese economy YoY,  “the economic model that took the country from poverty to great-power status seems broken, and everywhere are signs of distress.” (2)
• The transformation of globalization (so as to mitigate supply chain risks unearthed by the recent global pandemic); 
• Current efforts to “decouple” from China (with institutional investors bearish on further investment in China); 
• The U.S. reshoring of manufacturing and shortening supply chains; or
• China’s strategic maneuevers in the Global South and Africa. 

All these economic strategies and stressors are reactions to and symptoms of THE macro economic trend of the last thirty years – described here – which is the fundamental driver of the tetonic shifts in geopolitics playing out at Camp David and in South Africa – and deep inside the Chinese economy.   

Image Source: EEAGLI  

BRICs Versus the G7

EEAGLI generates sophisticated, accessible visualizations of complex macro and micro economic trends.  Starting in 1992, the time-based “BRICs “Versus the G7” (below) visualizes the BRIC countries path towards overtaking the G7 in global share of GDP – adjusted for purchasing power (PPP) – by 2028.  

It is this growing parity that is creating permission and incentive structures – along with new policy models and value proposition designs –  to enable the BRIC countries to move away from legacy fiscal and monetary systems “controlled” by the U.S. and the G7 countries (including, again, the assumption that the dollar will remain the singular fiat reserve currency on which the global economy is based).  

What Next? 

The questions now become:

1. What are the long term implications of this inevitable parity, followed by a gradual power shift, in the GDP share between the BRIC countries and the G7 countries? 
2. Is this Binary Fracture now the organizing principle of geopolitics (trumping East v. West, Caliphate v. Chistendom, or the end of Developed Nations v. Emerging Economies)? and
3. Is this global economic power shift the basis of China’s belief that it will win the war with the U.S. “without firing a shot“? 

Feature Image: Generated by OpenAI’s DALL-E with the prompt “policymakers at a summit remaking the global financial system in the style of Ai Weiwei”

Generated by OpenAI’s ChatGPT 3.5 

“When will the BRIC countries overtake the G7 countries in global share of Global Domestic Product (GDP) adjusted for purchasing power (PPP)?”

Predicting an exact timeline for when the BRIC countries (Brazil, Russia, India, and China) might overtake the G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom, United States) in terms of their combined share of global GDP adjusted for purchasing power parity (PPP) is extremely challenging due to the complex and dynamic nature of the global economy. Economic growth is influenced by a wide range of factors, including policy decisions, technological advancements, global trade dynamics, geopolitical events, and more.

While the BRIC countries have shown significant growth potential, it’s important to consider several factors that can affect the timeline of such a shift:

1. Economic Policies: The economic policies pursued by each country’s government play a crucial role in determining their growth trajectories. Pro-growth policies, investment in education, infrastructure, and research, as well as trade agreements, can impact economic growth rates.

2. Structural Factors: Demographics, urbanization, and industrialization rates can significantly affect economic growth. A country with a young and growing population, combined with a rising urban middle class, is likely to experience higher consumer demand and economic expansion.

3. Global Trade and Geopolitics: International trade relationships and geopolitical events can have both positive and negative effects on economic growth. Trade agreements, sanctions, and political stability can shape economic outcomes.

4. Technological Advancements: Technological innovations can drive economic growth by boosting productivity, efficiency, and creating new industries. Countries that are leaders in technology and innovation may experience faster growth.

5. Natural Resources: Countries with abundant natural resources can experience economic growth through resource extraction and export. However, dependence on a single resource can also make an economy vulnerable to commodity price fluctuations.

6. Global Economic Conditions: The overall health of the global economy, including factors such as recessions and financial crises, can impact growth rates.

Given the many variables involved, making accurate predictions about when the BRIC countries might overtake the G7 countries in PPP-adjusted GDP share is challenging. While some projections and experts have suggested potential timeframes, it’s important to approach such predictions with caution and to consider the inherent uncertainties involved.

“What is the history of the BRIC countries overtaking the G7 countries in global share of GDP?”

The BRIC countries (Brazil, Russia, India, and China) have been notable for their rapid economic growth and increasing influence on the global stage. However, as of that time, they had not yet overtaken the G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom, United States) in terms of their combined share of global GDP.

The concept of BRIC as an economic grouping was first coined by economist Jim O’Neill of Goldman Sachs in 2001. The term gained prominence due to its prediction that these four countries would become major players in the global economy by the mid-21st century, based on their large populations, growing economies, and vast resources.

China, in particular, has been a major driver of the BRIC countries’ economic growth. Its rapid industrialization and export-led growth model propelled it to become the world’s second-largest economy. India, another populous nation with a growing economy, has also been contributing significantly to the BRIC grouping’s economic potential.

The G7 countries, on the other hand, have historically been major economic powers, characterized by their advanced industrialization, technological innovation, and high standards of living. They have been influential in shaping global economic policies and institutions.

The notion of the BRIC countries overtaking the G7 in terms of GDP share was based on long-term projections of economic growth rates. These projections suggested that the combined GDP of the BRIC countries could surpass that of the G7 countries by a certain point in the future. However, these projections are subject to change due to various economic, political, and social factors that can influence growth trajectories.

It’s important to note that the global economic landscape is complex, and economic growth is influenced by a wide range of factors including domestic policies, international trade dynamics, technological advancements, demographic changes, and geopolitical events. As of my last update, the BRIC countries had made significant strides in terms of their economic growth and global influence, but whether they would eventually overtake the G7 in GDP share was still uncertain. 

“What is the history of the BRIC countries overtaking the G7 countries in global share of Global Domestic Product (GDP) adjusted for purchasing power (PPP)?”

The BRIC countries (Brazil, Russia, India, and China) had been experiencing significant economic growth and had gained prominence on the global stage. However, they had not yet overtaken the G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom, United States) in terms of their combined share of global GDP adjusted for purchasing power parity (PPP).

The concept of the BRIC countries as a significant economic grouping was popularized by economist Jim O’Neill of Goldman Sachs in 2001. These countries were identified for their large populations, growing economies, and potential to become major players in the global economy.

China’s rapid economic growth, fueled by its export-oriented manufacturing sector and economic reforms, made it a central focus of the BRIC grouping’s growth narrative. India’s large and increasingly educated workforce, along with its burgeoning service sector, also contributed to the group’s economic potential.

PPP-adjusted GDP is a way to compare the economic output of countries while accounting for differences in price levels and living costs. It provides a more accurate representation of the real purchasing power of countries’ economies.

While the BRIC countries were indeed experiencing substantial economic growth, overtaking the G7 countries in terms of PPP-adjusted GDP share was still a subject of debate and speculation. The G7 countries, despite slower growth rates compared to the BRIC nations, still represented a significant portion of the global economy due to their well-established industrialization, technological advancement, and high standards of living.

As of 2021, China had made the most progress in approaching the economic size of some G7 members, and some projections suggested that it could eventually surpass them in terms of PPP-adjusted GDP. However, the other BRIC countries, while growing, were not as close to achieving this level.

The global economic landscape is dynamic and influenced by a multitude of factors, including domestic policies, global trade dynamics, technological innovation, geopolitical events, and more. Therefore, whether the BRIC countries would eventually overtake the G7 countries in PPP-adjusted GDP share would depend on how these various factors unfolded over time.