In the last year, many analysts and investors have focused on China as the driver for global economic recovery. Actually, there are countries other than China that are experiencing significant economic growth, contributing to the global recovery. Many Asian countries and a few in South America are showing the world the way. The growth of these countries offers important export opportunities for the U.S.
In 2000, foreign business amounted to about 30% of the revenue for the S&P 500. Now it is up to approximately 50%. Within the S&P 500, this trend is even more noticeable as many technology, materials, energy, and industrials generate more than 60% of their revenues internationally. Companies such as FreePort McMoran, Accenture, Cisco, EMC, Microsoft, IBM, Chevron, Boeing, Caterpillar, Joy Global, Flowserve and even Apple are seeing the affect of this global growth trend.
China
Depending on whom you believe China's growth in the third quarter of 2009 will come in from 8.5 to 9.5%. This is up from 7.9 percent in the second quarter and 7.1 percent for the first half of 2009. The Asian development Bank projects China's growth at 9.5 to 9 percent. Goldman Sachs expects growth to come in closer to 9.5 percent. China is growing rapidly and the country has returned to the levels it reached before the global recession.
There are other signs that China continues to grow. According to China National Energy Administration, China's power consumption in September also continued to rise at a faster rate. Power consumption rose 10.24 percent from the same month last year to 322.41 billion kilowatt hours last month. The General Administration of Customs, China's foreign trade continued to fall in September, but the rate of decline slowed. The total value of imports and exports for September was 218.94 billion U.S. dollars, down 10.1 percent from the same month last year, but up 14.2 percent from August.
We know that China uses different ways to measure their economic performance, to these numbers do not necessarily translate into equivalent measures in other countries. However, the fact that China is growing rapidly cannot be ignored.
India and Rest of Asia
India is another rapid growth story. Growth in gross domestic product rose to 6.1 percent from a year earlier in the April-June quarter up from 5.8 percent in the previous quarter according to the government's Central Statistical Organisation. India is not nearly as dependent on exports as China, which helps the country to weather the global economic troubles. The biggest current threat for India is the lack of rain for their agriculture sector.
A drought will negatively affect the economy over the next half year, as declining agricultural output reduces demand for transportation and storage.
