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4 february 2012, china, china, china

Two inciteful economist articles tip their hat to the weight of evidence emerging that china, which we can read as shorthand for the growth (nee emerging) markets, is finally "decoupling" from the west's stuttering economies (1 january 2012), driven finally, by domestic growth. Even as its growth continued exponentially (by 9.2.%, meaning its economy has grown by 60% since 2008), china's net exports fell in 2011. Both public and private domestic consumption is on the rise, accounting now for about half china's growth. Yet, its housing boom slowed markedly, with prices falling in 52 of the largest 70 cities - a positive sign that consumer growth is not just a property bubble. Even more eye-catching, china's foreign reserves have fallen too, though that is yet to establish itself as a trend. There is no sign yet that china's trade deficit with america, the most pointed source of conflict between the superpowers, is ebbing; but the second article reflects shifting thinking in the validity of traditional calculations, using the ipad (I have one; I love it) as an example of something that appears to contribute mightily to those numbers, masses of the things being made in china and imported to the us. However, china itself imports large parts of that value, so whilst it accounts for $4bn of the reported trade deficit, a better estimate may be a piffling $150m. In terms of who gets the profit as a whole, the lion's share goes to american shareholders and workers, followed by south koreans, with chinese getting only some 2%. Meanwhile, the economist has bowed to the inevitable and last week started a whole new china section, joining america and britain (the magazine's base) as the only single countries to have such an honour; although I have frequently argued that europe (the state we're in) comes close...