For all the woe, two bits of news have emerged over the last few days to at least suggest there are signs global imbalances are closing.

Earlier this week, China’s latest trade figures were released. And of course, her trade surplus is still massive – $13.1bn in December. But, once again, import growth outpaced export growth. Exports jumped 17.9 per cent from the same time the year before, and imports by 25.6 per cent.

In the past, rises in Chinese imports were often a symptom of a need for her to buy in more products to feed her export boom. In other words, previous rises in imports actually offered little hope China was rebalancing. But this was not the case this time. Mark Williams, Senior China Economist at Capital Economics said: “The strong import performance has been driven almost entirely by domestic demand rather than the needs of import processing firms in the export sector. As long as policymakers can keep inflation under control without having to resort to drastic tightening (as we expect), import demand should remain strong in the months ahead. That raises the prospect that China’s trade imbalance could be reduced relatively rapidly over the next year or two without the need for major policy shifts. China usually runs substantial trade surpluses at the end of the year, but the December surplus was the smallest since April. In seasonally-adjusted terms, the surplus was the second lowest since 2004.”

There are a couple of worries. First of all, rising commodity prices appear to be the main reason why China’s imports rose, in which case we may not be seeing a fundamental switch in China. Second, the trade surplus with the US rose by 26 per cent, so US politicians won’t be much placated by the latest trade data.

But it is clear wages in China are rising, and are likely to increase at an even faster rate over the next few years as China runs out of workers to migrate into the towns. As China’s wages rise, it seems almost inevitable that China’s imports will rise, too.

And now we come to the second bit of promising news.

India has only gone out and bought itself 180 spanking new airplanes from Airbus. And 150 of the aircraft being ordered are the A380. We are not sure what the order is worth, but if the advertised price means anything, the deal is worth around $15.6bn. Mind you, call us cynical if you wish, but we guess there was a certain amount of negotiation with this deal. If India really did pay the published price, then the moon really is made of cheese.

Nonetheless, if you think about it, this really is a massive deal. China’s trade surplus in December was less than the list price of the Airbus aircraft.

It goes to show, those who fear that the rise of China and India is an ill wind, are not only being disingenuous towards the Indian and Chinese people, who no doubt deserve to be lifted out of poverty, but actually the rise in these countries is an opportunity for the West. At least, it’s an opportunity for Western economies that can learn to adjust rapidly, and don’t get themselves embroiled in the impossible task of hanging onto a sorry system that is suffocating life out of some eurozone economies.

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