Hamish McRae: This summit marks a shift in power to the East

Power is shifting East and if you want to take a moment when this has become glaringly evident, this week in Seoul is as good as any. It is not just that Korea is the host. Nor even is it the fact that the Group of 20, encompassing the largest emerging economies, is taking over from the old "rich club" of the Group of Seven. No, it is simply that this week it has become clear that the emerging countries have coped with the global downturn far better than the old developed world. Europe and North America go to the G20 hobbled by the debts of the most serious recession since the Second World War. Asia and much of Africa go there without having had a recession at all.

You can catch a feeling for this in the news of the past few days. There was the forecast that China will pass the US to become the world's largest economy, if exchange rates were adjusted to reflect purchasing power, within two years. There were the pictures of Chinese leaders in Portugal promising to lend the country money to ease its debts. There has been the sight of Barack Obama trekking round India and David Cameron round China seeking export deals.

There is also a big difference in the self-confidence of the countries that have avoided recession vis-à-vis those struggling to rekindle much growth. In previous post-war downturns the onus was on Western governments to fix things. Even 18 months ago, at the G20 in London, there was an implicit assumption that the package of initiatives announced by Gordon Brown would set the way forward. Now in Asia at least, the indebted West is seen as the problem, not the solution. It has been a North Atlantic recession, not a worldwide one. It would be harsh to say that we go as supplicants, while they – leaders of the emerging world – strut their power, but there is something of that.

In truth both worlds need each other and will continue to do so. We all need the open trading system, and the reasonable freedom of capital flows. The world has just had the greatest burst of prosperity it has ever known, prosperity quite widely shared if not widely enough. It would be mad to junk something that has worked pretty well. But all sides have to abide by the rules of that system, which require responsible policies by all.

To put this in context, see the world as still in the early stages of a power-shift as great as that which took place after the Industrial Revolution. Over the next two decades China and India will again become the dominant world economies, as they were 200 years ago. The G20 meeting is about their ideas, and those of the other large emerging economies will be incorporated into, and help shape, the existing global system. It is a system developed and ordered by the West. But it needs to adapt and this meeting is the start of a 20-year debate as to how that should be done.