Coping With China's Economic Takeover

Halfway through 2011, we've already seen an extraordinary year of volatility: turmoil across the Middle East and North Africa, the eurozone's ongoing fiscal crises, Japan's triple disaster, the killing of Osama bin Laden. Yet these dramatic events have obscured a slow-moving, underlying shift of much greater long-term importance: global rebalancing. In its simplest form, rebalancing means this: a reset of the global economy shifting the balance of accounts between the world's established and emerging powers or between its biggest consumers and biggest savers. That alone, of course, is a transition of landmark historic significance. Yet it is far from the only consequence, for rebalancing is not just an economic story, but one that will result in a seismic shift in the international balance of power, in every region of the world.