Wonkbook: China is the only emerging market that matters

(EPA/Long Wei)

By Matt O'Brien

The first rule of getting people to invest with you is coming up with an acronym. After all, everybody loves a good acronym. So that's what Goldman Sachs did 15 years ago when it coined the term "BRICs"—that's short for Brazil, Russia, India, and China—to describe the emerging markets that you had to have money in.

It was always a lie.

If that wasn't obvious before, it should be now. Consider this: Brazil is stuck in its worst recession since the 1930s, but still has double-digit inflation. That's what happens when your debt bubble and the global commodities bubble burst at the same time that your sinking currency sends prices soaring from their already elevated levels. And its government hasn't even been able to do anything about this, because it's collapsing itself due to a slow-motion corruption scandal.

Then there's Russia. It never had an economy so much as an oil-exporting business that subsidized everything else, so it's also shrinking now that oil prices have fallen so far -- which, of course, Western sanctions have only made worse. Now, India is actually doing pretty well, but it's still struggling to streamline its regulations and build enough infrastructure so that it can grow as much as it could. And China might be growing fast compared to almost any other country, but not to its own lofty standards. Money is pouring out now that China's economy is starting to slow down under the weight of having built more factories than it needs and borrowed more money than it wants. That's made its stock market crash, and would have made its currency do so as well if the government's wasn't spending so much to prop it up.