While the United States' economy and markets are outperforming those of Europe and Japan, its performance is not eclipsing that of China and some other Asian countries, says Jim O'Neill, the former chairman of Goldman Sachs Asset Management International.
"Even though China is so-called slowing, its 7% growth this year will add twice what the U.S. is adding to global GDP, and India is picking up," O'Neill said Monday on Bloomberg TV. "A lot of people still don't really seem to get how the contribution to global GDP is changing."
Over the past few weeks, O'Neill says, China's stock market "has been the strongest in the world."
The Shanghai Stock Exchange Composite Index is up more than 20% since the government cut interest rates there on Nov. 21.
"Everyone on the planet everyone is bullish about the U.S., but everyone seemingly but me, is bearish on China, which seems kind of ridiculous – but there you go," O'Neill said.
Stocks have continued to rise in China even after news broke over the weekend that its exports rose 4.7% vs. an estimate of 8%, and imports dropped 6.7% vs. the expected improvement of 3.8%, Bloomberg says.
O'Neill admits that further signs of softness in China's domestic economy could affect markets there, but only if they "raise issues about cyclical momentum."
And the story about economic performance in the emerging economies goes beyond China, he adds.
"If you reflect back over the year with concerns of the so-called emerging markets and how they performed, with improvements in government and the … size of economic reform [packages], investors have been rewarded. And India and Indonesia have been some of the biggest reformers," he explained, in sharp contrast to other countries that have not implemented reforms like Brazil.
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