Global economic growth in 2004 was the strongest in two decades, led by the ``dual engines'' of China and the United States, said the chief economist of FedEx Corp.
``Last year, the U.S. and China ... accounted for 50 percent of global [gross domestic product] growth,'' said Gene Huang.
Memphis, Tenn.-based FedEx ships all around the world. Huang shared his front-row views on world trade in a Feb. 28 presentation, to kick off the Plastics News Executive Forum.
Huang said Japan and Europe also have growing economies. But all eyes are on China.
``China continues to astonish people, with close to double-digit growth,'' he said.
Imports and exports in China for 2004 grew at twice the pace of world trade. Huang said the country also attracted $55 billion worth of foreign direct investment - 10 percent of the world's total.
Huang, a native of China, is managing director of FedEx's economic and industry analysis group, where he forecasts global economic and financial conditions.
Some U.S. industrialists view imports from China as a threat. But Huang noted China's huge domestic market, with an economy driven by capital investment and domestic consumption and a heavy manufacturing emphasis.
``China's growth is mainly investment-driven; it's not trade growth. It's very different from many Asian countries,'' he said.
``Imagine, 1.3 billion people. They can save money. They also like to spend.''
China gobbles up a big portion of the world's commodities, including iron ore, rubber and scrap metal. Huang said half of the cranes in the world are in China, building office buildings and factories.
At the same time, China is not energy-efficient by modern standards. Huang said the country uses five times the energy to make the same goods as the rest of the world. Chinese officials are ``keenly aware'' that the country must improve, he said.
Turning to the United States, Huang predicts GDP growth of 3.5-3.6 percent this year, above the trend line of 3.2 percent. He said the U.S. economy this year should remain steady, if unexciting.
Huang said the United States is in the early stage of a midcycle recovery - meaning the big factors will be higher inflation and Federal Reserve Board moves to increase interest rates.
He also touched on the hot topic of currency, saying any move to allow the yuan to float freely will be a political decision by China. He also stressed the importance of a stable U.S. dollar.