David Prosser: China and India are the hot tickets as the East rises

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The Independent Online

Davos Outlook Davos may be full of power-brokers but here, like everywhere else on the planet, there is a hierarchy. And this year, that hierarchy has changed: not only are the Chinese and the Indians here in force, but it is their delegations to whom everyone wants to talk.

Here, in what might once have been considered a temple to the Western capitalist model, the much-discussed shift of power from West to East (and to the South too, given the growing importance of Latin and South America) is a current that runs through all the debates.

It is undermining some hoary old clichés. The term "emerging market", for example, looks utterly out of date. Emerging markets are characterised by uncertainty and volatility, yet all the doubts about the world outlook for the year ahead concern the so-called advanced economies. Can the US get its people back to work and begin to grapple with its stupendous deficit? Can Europe avoid a double-dip recession and finally put the eurozone sovereign debt crisis behind it? Will Japan ever find a way back from the abyss?

The nervousness of Western economists and business people is palpable and it continues to find an outlet in what might in other circumstances be described as jingoism. The complaints about India's failure to open up to foreign investors continue. As do concerns about the over-valuation of the Chinese currency. The scourge of unemployment that blights so many Western economies is debated in the context of whether jobs have shifted to Asia.

But the emerging market delegations have the confidence not to be bullied. Indian businesses point out that protectionism is a two-way street – observing archly that of 600 free trade agreements now in force around the world, the US is party to just 20 of them. The Chinese listen to complaints about the yuan and then politely inquire when the US might do something about that deficit.

We should not over-simplify: even this year, the prognosis is complicated. Chinese and Indian growth is likely to slow, while the US and Germany will almost certainly outstrip the rest of the West. But there is no doubt about it: the Davos delegates from Asia have a spring in their step while their Western counterparts are struggling to keep pace.

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