SEOUL — According to conventional wisdom, the global economic crisis is accelerating the transfer of power and influence from the West to Asia. The United States has been particularly hard hit by the downturn and America's loss is China's gain.
The Group of Eight industrialized nations, the traditional locus of power, has been fatally wounded. In the future, goes the argument, the most important forum will be the Group of 20.
If this analysis is correct, it suggests that another fundamental shift in global economic activity is due. Western demand will no longer serve as the primary engine of growth. Instead, Asian nations will abandon export-oriented economic models and embrace domestic consumption to generate growth. That will put in train another set of "knock-on effects," the most important being the development of social safety nets that no longer oblige their citizens to save so much of their income and instead encourage them to consume.