The rise of state capitalism and vast sovereign wealth funds in Abu Dhabi, China, Singapore and Dubai will likely tip the terms of trade in favor of these newly powerful nations and city states. In addition, emerging economies' populations will grow and become better educated, leading to more competition for jobs around the world, even at the highest levels. According to Stephen D. King, HSBC's Group chief economist and global head of Economics and Asset Allocation Research, and author of the book “Losing Control: The Emerging Threats to Western Prosperity”, many Asian and Gulf states are already cutting exclusive deals with African countries to take over vast tracts of land for mining or growing crops to guarantee food security for their own populations. “We're beginning to see the creation of a new, global Silk Road linking emerging nations in Asia, the Middle East, Eastern Europe, Africa and Latin America via land, sea and the electronic ether,” he said. King further said the West has prospered since global trade began through colonialism, the development of liberal democracy, technological innovation, good education and legal systems, not to mention the collectivism that has choked growth in China and Russia. But now markets are more open than ever, labor is more mobile, and technological innovation is spreading around the world. He explained how the over-reliance of Western economies on financial services, combined with the burden of ageing populations, has resulted in the BRIC club of emerging economic superpowers - Brazil, Russia, India and China - coming to the fore as the new global economic powers who will, in future, grab the largest share of the world's scarce resources and generate most of the profits from growing businesses. The globalization that the Western world thought would help make it rich, may well end up doing the opposite. “Bilateral trade between emerging nations is increasingly replacing trade with the West and a country like China will be able to demand that their currency, the renminbi, is used for these transactions,” said King. “The renminbi could replace the US dollar as the world's standard trading currency within 20 years.” King was interviewed at “The Signature” at Capital Club Dubai, the region's premier private business club.
