Diesel Progress North American

wrong every time, yet the media continues to point to poorly performing stock markets as a good reason to believe that the U.S. economy is likely to fall into recession again. It’s not.

And here’s why. The U.S., the EU and Japan — the places we have spent most of our lives thinking about as the world’s developed economies — are not as important to growth of the global economy as they used to be. The U.S., in particular, was typically given credit for being the “engine” of global growth. That remained true through the last decade of the 20th century, but a funny thing happened on the way to the second decade of the 21st century — the creation of a second engine.

The unprecedented growth of the Chinese economy will be studied in college classrooms for the rest of this century. What will also be studied is how the one country on the planet with an even larger population managed to duplicate China’s unprecedented feat. That country, of course, would be India.

The numbers look like this: According to a study conducted by the U.S. Conference Board, U.S. economic output accounted for 17.9% of global economic output in 2008. The rest of the “ developed world” accounted for another 30.2% for a developed world total of 48.1%. That means that the “ developing” world accounted for 51.9% of global economic output in 2008. It was estimated that China accounted for 14.2% of the global total all by itself. India added 5%, and the rest of Asia added another 5.5%. In sum, the Asian regional economy now accounts for 24.7% of the global economy. Why is this good news?

The short answer is that the global
economy is highly integrated. The
Asian economies aren’t quite as high-
ly integrated as Germany and France
or the U.S. and Canada, but they
are getting there. More importantly,
the Asian economies are becoming
just as highly integrated with North
America and Europe as those two
regions have been with each other
It is also good because growth in
the global economy is going to come
more from Asia than either the EU
or the U.S. from 2011 to 2016. The
Conference Board forecast is that
Asia will grow at a rate of 7.5% per
year in that timeframe. Since our
economies are integrated, we will
benefit from that growth. One of the
obvious benefits that will ultimately
result from Asian economic growth is
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