David Hale (DH): Emerging markets are a large and growing part of the world economy. They’re significantly outperforming the old industrial countries. Their growth rates over the last four years have been around 6+%. The old industrial countries have a growth rate less than 2%. And this will continue indefinitely. Emerging markets now account for about 36% of global GDP [gross domestic product], but they account for half of global exports and half of global capital spending. They’ve also got $7 trillion of foreign exchange reserves, compared to $3 trillion in the old industrial countries.
China plays a big part in this. China is now the world’s largest exporter of tradable goods. China’s investment share of GDP is 48%. Most developing countries are somewhere between 25% and 35%. Most old industrial countries are between 15% and 16%. China also has $3.3 trillion of foreign exchange reserves, so it is a big part of that story.
But the fact is that we’ve had high growth rates elsewhere in Asia. We have a 5.5% growth rate this year in Africa. We have very high growth rates in Latin America and Europe: 7% in Brazil, 5% to 6% in Chile, and 7% or 8% in Peru. So it’s a growth story.