The current assumption is that the post-crisis political economy will reflect the rising influence of China, probably of India, and of other large emerging economies. Supposedly, the United States, the epicentre of the financial crisis, will see its economic power and influence diminish.

There are good reasons for this perception. China has responded strongly to the crisis, both in terms of stimulus and monetary policies, and it seems to have a deep treasure chest to back up its first moves. China has enjoyed a rapid recovery, which has assisted others, underscoring China's growing influence.

Indeed, today, China acts as a stabilising force in the global economy. Together, China and India account for 8.5 per cent of world output. They and other developing countries are growing substantially more rapidly than developed countries.

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And yet China's future is not yet determined. Its rapid recovery in 2009 was fuelled by an expansion of credit of 26 per cent of GDP in the first eight months of this year. This flood is now easing, and authorities are likely to limit it further for fear of effects on asset prices, asset quality, and eventually general inflation. China still faces big uncertainties in 2010.

China's leaders recognise these risks, including the continued dependence of China and other emerging economies on export-led growth. It will not be easy for China to shift to increasing reliance on domestic demand, especially to greater consumption that could help balance world growth while contributing to China's goal of a more "harmonious society". China's protected service sector, including financial services, limits opportunities for entrepreneurs and increases in productivity.

The US, in turn, has been hit hard by the crisis. But America has a culture of resilience to set-backs, adapting to new circumstances and remaking itself.

The future for the US will depend on whether and how it will address large deficits, recover without inflation that could undermine its credit and currency, and overhaul its financial system to preserve innovation while adding to safety and soundness.

Taken from a speech by the President of the World Bank to John Hopkins University on Monday