Emerging market growth picked up “sharply” in January, the Financial Times reports, citing data from the Institute of International Finance that found rebounds in “industrial production and trade, particularly exports. … The apparent surge in EM growth coincides with surprisingly strong trade figures from China, which said its exports were up 7.9 per cent in January while its imports jumped 16.7 per cent, bolstering optimism about the health of the world’s second-biggest economy.”

If Goldman Sachs thinks the US market is getting “growthier,” as we noted yesterday, Morgan Stanley Sees slower growth in China, but argues income will still rise, writes Jennifer Hughes for the Financial Times. Morgan Stanley published a 118-page long report “explaining how the world’s second biggest economy will avoid the sort of financial shock feared by western investors, and make it to official ‘high income’ status in the next 10 years.” Incomes will rise to USD 12,500 by 2027. Morgan argues that even though debt is high, it is funded by Chinese savings, not external finance. It says growth might be slow, but it will accelerate. “With a starting point of lower debt and per capita levels and by not allowing for a sharp appreciation of its currency as Japan did after the Plaza Accord, China today is arguably better positioned to still achieve growth rates that can outpace global growth.” High domestic consumption will help: Services are set make up 60% of GDP by 2030. Despite the positive outlook, the report says: “China needs to manage its debt burden carefully, and not let the need for growth to trump this.”