The next global upswing won't be China-led, but it will be China supported as its long-term adjustment matures and stabilises. It won't be Europe or Japan-led either, though these will be mature followers in whatever transpires PROVIDED Europe doesn't tear itself apart (something that might start as a sideshow but not end up as one, if severely disabling enough, not only thinking Brexit here but going much wider if the migrant crisis were to intensify).

The next global upswing will be American-led, as it has been so far since 2010, if as yet hardly noticeable. And it will be ably assisted by a range of Emerging Markets and already industrialized ones, to the extent that like the US they are also robust reinventers of themselves.

In contrast, poor reformers and adapters will likely remain stuck in their old path dependencies, and fail to engineer early breakout options, instead having to wait for the wheel of fortune to eventually come around again to even favour them, too, if potentially in minor ways.

The focus should not be on the trapped victims of their own shortcomings, but on the successful adapters and reinventers. Each continent is likely to have a representative, or even a batch. These proactive modernisers, along with the US, will form a global set of locomotives, with China an important prop as it has acquired global critical mass and likely will sustain its development effort, if with a different mix at a more subdued pace than the past three decades. The global rest will remain observers, only very gradually benefitting from the changing global panorama.

Why the focus on the US? The endless handwringing, the slow (2%) GDP growth, the disappointing productivity pace (compared to long-running averages), the low near-zero inflation, between them feeding fears of imminent recession and relapse into deflation, with the Fed by now seen as powerless to step into the breach, are powerful negatives. Hardly the kind of profile denominating one as locomotive.

Yet this is not the whole story. Indeed, these are distorted prisms. There are others offering quite a different sense of what they have been up to. The banking, property and fiscal cleanups. The post-crisis restoration in wealth levels. But the real beating heart is the labour market. And of course underpinning it all is its great technological change engine, with its many distorting measuring effects.

As regards the US labour market, its recovery pace is said to be slow, and not accelerating. Yet we get this steady drumbeat,  year-in year-out reabsorbing labour shed during the great crisis, reinventing the structure of the economy, nearly entirely in services sectors.

At the same time, the political barometer registers growing anger in the US heartland. This is partly traceable to middle class income strains, with too many new jobs not as well paying and real wages not lifting, reflecting deep income and wealth distribution issues not addressed. But that won't prevent recovery, even if characterizing it. And not all the political anger has economic roots.

As regards China, after a turbulent nine months, concerns about her near-term growth outlook and risks of an one-off large Yuan devaluation have stabilised somewhat, as the Chinese have provided fiscal and monetary support, made efforts to improve policy communication and capital outflows have slowed from a record pace in December-January. Higher commodity prices, additional central bank support and the waning of Dollar strength have supported Emerging Assets more broadly.

What is missing from this discussion so far?

A listing of EM and other industrial countries matching the robustness of US recuperation, forming with her the lead locomotives for the next wave if global expansion that is taking shape. Think South Korea and likeminded.

Proof that Europe will not tear itself apart, in the process creating a global shock. Similarly, proof that China will be successful in its transition from export-led to internally-dependent, and stabilizing as a critical prop for the next phase of global expansion.

Nice, clean proof that the pace of technological change this past decade has been a major feature in suppressing productivity and economic growth worldwide (aside of structural causes, and tempered animal spirits markets- and business-wise in the slow post-crisis recuperation phase). And these same influences responsible for constraining global inflation (aside of resource surpluses, and massive commodity price declines, especially energy, favouring users).

All of this aside of the question whether macro (fiscal & monetary) globally remains resilient enough to match all eventualities, or that it has become dangerously overstretched.

For me the outline provided suggests a gradual acceleration in global activity into the next decade, technology driven, beyond post-crisis cleanups, led by reinventers. Any underperforming parts of the global system should not detract from this.

South Africans should be able to identify themselves in these global dimensions, as much the core technological change process, as the ABSENCE of robust structural change, threatening to keep us path dependent effectively hoping for the global wheel of fortune to turn, again granting us some easy massive windfall allowing us to overcoming our chronic political weakness as compared to more decisively take the reins in our own hands, reinvent that what can be done by ourselves, however challenging, and rank as a global reinventer.

On this score we likely will remain a late developer, having to overcome internal political hurdles first before we can regain a measure of growth speed.

Cees Bruggemans

Chairman Bruggemans & Associates Consulting Economists

Website  www.bruggemans.co.za

Email   economics@bruggemans.co.za

Twitter  @ceesbruggemans

Short Profile Dr CW Bruggemans

Chairman, Bruggemans & Associates Consulting Economists

Consulting Economist, Avior Capital Markets

Consulting Economist, Ince (Pty) Ltd

Consulting Economist, Hellmann Logistics (Pty) Ltd

Consulting Economist, Bureau for Economic Research (BER), Stellenbosch

Honorary Professor of Economics, University of Stellenbosch