Google Alerts tell me that I've been quoted around the world for saying, of the current markets crisis: 'This time next year we'll be seeing things back to normal.' Each one comes as a surprise, because I don't remember saying that. But it's true.
We've grown up for so long being focused on America as the world's engine of growth that any problem there looks like a catastrophe. 'When America sneezes, the world catches cold,' as they say. That might, of course, be true of bankrupt little Britain, which I figure is already in recession. But much of the rest of the world isn't even sniffling. In fact it is in rude health. I'd wager that 2009 won't see the world plummeting into disaster, and that world economic growth will come in at 3% – or more – well above what our little corner of it has been able to achieve in the last decade or three.
There's been so much dust flying around Wall Street that people seem blind to the fact that China, the world's fourth-biggest economy, is still growing 8%-10% a year, and retail sales there are up 16% real on last year. China's shoppers are now more important to world prosperity than America's. And (like the Brits) Americans have financed their shopping spree by borrowing, which they're going to be doing less of now that falling house prices make them feel poorer. We're seeing a global shift in the economic realities.
Of course, it's not over for America, or even Britain. As their currencies slide they are exporting more – precisely to those places, like China and India, which are growing fast and need their specialist skills and equipment to make that expansion happen. The financial markets of America, Britain and to a lesser extent Germany might be jumping out of windows, but the real economy is out on the street, selling. As Adam Smith said, there's a deal of ruin in a nation. There's a deal more in a world.
