Russia’s recent “pivot East” has become a geopolitical cliché. It’s now widely understood that one of the most significant consequences of sanctions imposed by America and (less enthusiastically) the European Union has been significantly to strengthen relations between Moscow and Beijing.
Enemies for much of the Cold War, Russia and China have been building serious commercial and diplomatic ties across their 2,700-mile border for well over a decade. Since 2002, their bilateral trade has grown 7-fold, to almost $100bn annually, as both sides recognize the economic synergies between the world’s largest energy exporter and the biggest and most populous manufacturer on the planet.
Back in mid-2013, America’s Federal Reserve signalled that its massive money-printing programme – so-called quantitative easing – would be coming to an end. Just the hint of “tapering” was enough to destabilise the US government bond market. The yield on 10-year Treasuries spiked above 3pc, from 1.7pc at the start of last year. The Fed, after all, since QE began in late 2008, had bought hundreds of billions of dollars of US sovereign IOUs.
For now, America’s Treasury market seems relatively stable, even though the taper eventually happened and QE officially ended this autumn. The US government currently pays a relatively benign 2.15pc to borrow 10-year money, despite its vast debt mountain just hitting $18,000bn – a mind-boggling 78pc up since President Obama took office in early 2009.
Is India’s star still shining? Or is this express-train economy heading for the buffers? When it comes to writing about India, it’s hard not to wallow in superlatives and resort to clichés. The scale of the recent economic change is so enormous, the transformation so fast. Back in 1770, as the Western world’s industrial revolution began, India accounted for no less than 15pc of global output. Pretty soon, the sub-continent, with its burgeoning population, tech-savvy business elite and ubiquitous shopping malls will be an economic superpower once more.
Already the world’s tenth-largest economy, India is on course to rank second by 2040 – behind China, with America by then coming in third. On a purchasing power parity basis, in fact, adjusting for the cost of living, India is already the third-largest economy on earth.
With its 1.2bn people, India’s population is second only to China. These two Asian giants boast 2.6bn citizens between them, over a third of the entire global population. What’s really striking is that half of India’s citizens are below the age of 28 – providing a fast-expanding workforce over the coming decades, a major source of growth. Many of these new workers will be English-speaking and educated, part of a labour explosion likely to drag down blue- and white-collar wages across the Western world.