But is the slowdown in China and the slumps in major emerging economies the cause of the world's economic problems? This argument is partly based on the claim that emerging economies are driving the world economy. According to IMF figures, emerging economies make up 57 percent of world GDP, outstripping the advanced capital countries. But this is a wild exaggeration because the IMF calculation uses purchasing power parity (PPP). This measures what you can spend or invest in local currency in any country. It exaggerates the national output of emerging economies. In the real world trade and investment GDP is measured in dollars.

In dollar terms, emerging economies produce only 40 percent of world GDP. True, that share has doubled since 2002, but the top seven major capitalist economies have a greater share than all the emerging economies, with 46 percent. And in the last two years, that share has stabilized.

While China's share of world dollar GDP has rocketed from just 4 percent in 2002 to 15 percent now, it is still much smaller than the share of world GDP for the U.S. which has fallen from 32 percent in 2002 to 24 percent now. This shows the tremendous expansion of the Chinese economy. It also shows that the U.S. remains the pivotal economy for any global capitalist crisis particularly because it dominates the world's financial and technology sectors. For example, in 1998, emerging economies experienced a major economic and financial crisis that did not lead to a global slump. However, in 2008, the U.S. had a biggest slump in its post 1945 economic history and this led to a global recession, the Great Recession. This weighting still applies.

The fate of the U.S. economy is not determined whether by the level of interest rates is "too high" or "too low." It is the level of corporate profits and investment that is decisive. Investment drives employment and incomes and this shapes economic growth.

A growing body of evidence shows that the profitability of capital, and corporate profits generally, lead business investment with a lag of 12-18 months, upwards and downwards. Currently global corporate profits (a weighted average of U.S., U.K., Germany, Japan and China) have turned negative, and U.S. corporate profits are also falling (on a year on year basis). This suggests that business investment, which has been expanding at about a 5 percent rate in the U.S., will start to drop too within a year or so. If that happens, the U.S. will likely head into recession. So, it won't be China or other emerging economies that will cause the new world economic crisis.

Heiko Khoo is a columnist with China.org.cn. For more information please visit:

http://m.shenbo75.com/opinion/heikokhoo.htm

Michael Roberts is a London based Marxist economist and who works in London's financial services industry. He published the "The Great Recession" in 2008 and "Essays on Inequality" in 2014.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.