Stop doubting emerging economies. China is still growing and all this cheap oil will do wonders.
In current-dollar terms, China’s economy is now twice the size of Japan’s. Again, investors seem more energized by the smaller case. Japan would have to grow at a rate in excess of 10 percent to make a bigger contribution to global output than China. Or look at Europe. China is bigger than Germany, France and Italy combined: The biggest euro economies would need to grow by more than 7 percent to rival its addition to global activity. In other words, a sense of proportion would be good.
China’s “weak” growth isn’t the only encouraging global indicator. India too is on the way to becoming a globally significant economy. It’s already about the same size as Italy, or three-quarters the size of the U.K. economy, in current-dollar terms. Adjusted for differences in purchasing power, its addition to global output will far exceed theirs in 2014.