Tuesday, April 18, 2017

Vietnam and China have become major economic forces over the last 30 years

Recently PWC published a study about the long-term outlook of the global economy and about the ongoing shift in the balance of economic power in the world which essentially showed very clearly how some countries had become very important economic powers over the last 20 to 30 years including China and Vietnam and also India to some extent. 

That study concluded that by 2050, India, purchasing power adjusted, could be the third largest economy or the even the second largest economy. If you look at what has happened in Europe and the US where despite all the fiscal stimulus and money printing you have essentially very anaemic growth and you look at China where you have around 6%-7% growth while India has over 7% growth, who knows? 

Over the long term if you can grow even 5%, which in the global economy is a very rapid growth rate compared to Europe and the US, as an investor for the next 5 years, 10 years or 20 years, I would find ways to invest in India and in emerging markets in general. 

The emerging markets that is going to grow probably the most is Vietnam and Indo-China, Cambodia Laos, Myanmar. But having the outlook for India and with the proviso that we do not get into a major military confrontation. If we have peace and are nor beset by any huge natural disaster like a pandemic, then I the outlook for the Chinese economy, for the Indian economy, for emerging markets in general is far superior to the outlook in our rotten western democracies.