Some Asian equity indexes are up over 30% this year. (Photo: AP)

While the United States’ economy and markets are outperforming those of Europe and Japan, its performance is not eclipsing that of China and some other Asian countries, says Jim O’Neill, the former chairman of Goldman Sachs Asset Management International.

“Even though China is so-called slowing, its 7% growth this year will add twice what the U.S. is adding to global GDP, and India is picking up,” O’Neill said Monday on Bloomberg TV. “A lot of people still don’t really seem to get how the contribution to global GDP is changing.”

Over the past few weeks, O’Neill says, China’s stock market “has been the strongest in the world.”

The Shanghai Stock Exchange Composite Index is up more than 20% since the government cut interest rates there on Nov. 21.

“Everyone on the planet everyone is bullish about the U.S., but everyone seemingly but me, is bearish on China, which seems kind of ridiculous – but there you go,” O’Neill said.

Stocks have continued to rise in China even after news broke over the weekend that its exports rose 4.7% vs. an estimate of 8%, and imports dropped 6.7% vs. the expected improvement of 3.8%, Bloomberg says.

O’Neill admits that further signs of softness in China’s domestic economy could affect markets there, but only if they “raise issues about cyclical momentum.”

And the story about economic performance in the emerging economies goes beyond China, he adds.

“If you reflect back over the year with concerns of the so-called emerging markets and how they performed, with improvements in government and the … size of economic reform [packages], investors have been rewarded. And India and Indonesia have been some of the biggest reformers,” he explained, in sharp contrast to other countries that have not implemented reforms like Brazil.

Big Picture

The impressive improvement in some economies and stock markets is worth investor attention and appreciation, the economist says.

“The so-called emerging markets are all quite different. They don’t move in unison. Take the impact of cheaper oil. Just as in the advanced economies, it’s good news for some (the equivalent of a tax cut) and bad news for others (the equivalent of a cut in income),” he explained in an opinion piece for Bloomberg.

“It’s unhelpful to generalize. Many of the world’s star performers in 2014 were emerging-market economies. The same will be true in 2015,” he stressed.

Year to date, the Shanghai benchmark index is up about 30% this year, while India’s has improved about 35%, Indonesia’s 20% and Turkey’s 25%.

When it comes to China, “remember that China will be a $10 trillion economy by the end of 2014; that during the course of this year’s slowdown, it added roughly $1 trillion to world output; and that slowing growth in China is still quite rapid by most countries’ standards,” O’Neill says.

Plus, when looked at in current-dollar terms, China’s economy is twice the size of Japan’s, he points out.

Furthermore, China is bigger than Germany, France and Italy combined: “The biggest euro economies would need to grow by more than 7% to rival its addition to global activity,” O’Neill said. “In other words, a sense of proportion would be good.”

India’s economy, he adds, is about the same size as Italy’s, and its contribution to global output should surpass that of the United Kingdom this year.

— Check out Are Asian ETFs Going Higher? on ThinkAdvisor.