"A more dynamic Indian economy is just what the world needs right now

Between 1980 and the mid-2000s, China increased its exports dramatically.

- Tim Leunig

This year, its trade surplus passed $1tn.For most of us the China shock - the surge in US imports of Chinese goods - was good news. It meant things got cheaper. The developed world is typically about £1,000 per household better off as a result. Lower inflationary pressure also allowed lower interest rates, encouraging investment in the economies of developed countries.

At the same time, the proportion of people in China living in extreme poverty fell from almost everyone in 1980 to almost no one today. These were good times; the world needs more big economic shocks like this.

Thankfully, the next one may be upon us. This year, India will outpace China on growth for the fourth year running - something that hasn't happened since at least 1960. Although it’s worth being a little sceptical about reported growth rates (the Chinese example should not be followed there), India is now 30% richer than it was before Covid and is growing at a pretty stonking 6% a year.