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Global markets

Are we witnessing the change of world order in terms of global economics?

John Hewison
Founder and Director
15 Aug 2011

There was a wild reaction by world share markets to the European debt dilemma and the US political “game-playing” which resulted in the downgrade of their credit rating from AAA to AA+ by Standard & Poor’s. Surely this was a graphic market statement to the politicians generally that their performance was unacceptable and they needed to lift their game in terms of making suitably strong policy to seriously deal with their respective debt issues.

It is certainly an intriguing era full of contradictions in respect to world economic and market performance with some countries struggling to achieve positive growth and deal with debt whilst others flourish. Even within some regions there are stark contrasts in terms in economic performance and prosperity, in particular Europe.
With the growth economies of Asia led by China, the Pacific region in general and other arising growth economies throughout the world could this be a change in the world order of economic power? We saw Japan rise to almost eclipse the USA economy in the 1980s, but the growth of China appears to be unstoppable with 200 million people expected to graduate from the rural sector to the affluent urban sector over the next 10 years.  It is inevitable that China will become the world economic leader in the foreseeable future.
It used to be said that Australia “rode on the sheep’s back” when we mostly relied on wool and primary production for economic output. In the past we struggled to maintain a balance of trade when our major trading partners were the UK and the US. Now times have changed and the export of resources plays such a major part in our economy with our major trading partners now being our Asian neighbours. Certainly Australia’s economic profile has changed dramatically over the past few decades and our economy is now seen as well regulated, robust and sustainable in the overall global scheme of things. Hence, the strength of the Australian $ is likely to continue for some considerable time. 
Economically speaking, where else in the world would you rather be than right here in Australia?


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.