Economic history shows that the global economy has progressed in the past depending upon the higher growth rate produced by some of the largest economies. In the first half of the last century, it was the higher growth rate of the US economy that contributed to the advancement of the global economy. Higher GDP growth and increased income in the US encouraged US imports from other countries. Exports to the US implies enhanced economic growth and increased income in other (exporting) countries.
In the last couple of decade, global economic growth was well supported by China’s gigantic growth rate of around 9%. But for China, there was a difference. Its growth was created by high level of domestic investment rather than high domestic consumption. This means when China invested, China produced and China exported. Here, the world economy while receiving Chinese goods has transferred income to China.
Now, Chinese economic growth is low at around 6.7%; which is the new normal for it. On the other hand, India has emerged as the new fastest growing economy among big economies (at a growth rate of around 7.6%).