China GDP approaching 20% of global share

China has been one of the biggest profiteers and its GDP share is now approaching 20% of global. See what our charts show plus equity, inflation and ESG data.

By 
Julius Probst, PhD
 on 
October 22, 2021

The first charts focus on Emerging Markets. It is fair to say that many developed economies have experienced spectacular catch-up growth in the 90s and 2000s thanks to hyper globalisation. As the following chart shows, China has been one of the biggest profiteers and its GDP share is now approaching 20% of global. At the same time, the global export share of GDP has fallen in recent decades, indicating that some emerging markets that have gained a lot via trade might now have to reconsider that growth model.

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While emerging markets have caught up a lot, long-run macroeconomic and institutional fundamentals in many developed economies are lagging. As the Heritage Foundation Economic Freedom index shows, EMs are significantly less free and have also not gained that much ground in recent years.

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Moreover, the World Bank’s government effectiveness, and index ranging from -2.5 to 2.5, shows a very similar trend. Compared to advanced economies, many emerging markets are scoring quite poorly. More importantly, some of them have also seen very little to no improvement in recent decades.


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Turkey is the prime example of the Erdogan government exerting significant pressure on the Bank of Turkey to pursue an easy money policy. The official inflation rate has increased recently to close to 20% on a YoY basis. Meanwhile, the Turkish Lira-Euro exchange rate has gone from 6.5 in early 2020 to now over 10.8, a 50% depreciation in just 2 years. Meanwhile, the Bank of Turkey has now cut its policy rate yesterday by 200 basis points in one day, leading to further currency depreciation.

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Emerging Market equity performance has also been relatively poor and US equities have outperformed by a large margin since 2012.

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The following chart shows how supply-side disruptions continue to affect the global economy. We have added new data for the port of Los Angeles, showing how the number of vessels in the harbor has increased significantly in recent weeks as well as the average number of days at anchor.  

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There is an extremely tight correlation between the US breakeven inflation rate and the oil price. This is somewhat puzzling insofar as oil is not such an important input anymore.


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Total US oil consumption reached its peak in 2005. The following chart shows that the US economy was more than three times as oil intensive in the 1970s as it is right now, i.e. it took three times as much oil to generate the same dollar value of real GDP. 

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