It is a common mistake to think of China and India as ‘emerging markets’.

True, the West has dominated the global economic landscape for more than 200 years, starting with the Industrial Revolution just up the road in Telford. However, by about 1000AD China and India accounted for about half of the world’s annual output while Europe was only just emerging from the Dark Ages.

From the Middle Ages, though, these highly inventive and enterprising cultures turned inwards and lost their leadership of the economic world for centuries. It is only in recent years that China and India have ‘re-emerged’, and - from their perspective - regained their rightful place in the world.

Some of the factors that have encouraged their economies to bloom again include:

* Membership of the World Trade Organisation, which lowered tariffs and barriers to trade

* A well-educated and entrepreneurial diaspora scattered across the West showing renewed interest in their home country

* Increasing labour costs in the West, and outsourcing to ‘lower-cost’ economies in Asia.

This has led to a huge explosion in growth - with China’s economy until very recently growing at more than ten per cent a year.

So, by GDP measurements alone, these are massive economies – but by GDP per capita they aren’t.

Huge differences still exist between the ‘old’ and the ‘new’. Unlike the UK or the US, there is no uniform level of income distribution across China, India (and Russia) with their massive hinterlands of agricultural workers. For example, the vast majority of China’s 1.1 billion population still live on the land.

Nevertheless, the pace of change in these economies has been remarkable. While ‘emerging’ implies they are still catching up with us, there are some areas where China and India are real technological competitors with the West - in technology, with telecom equipment companies like Huawei and ZTE, and in consumer goods with the likes of Haier. These companies use innovation and operational excellence to compete, not just cheap labour and imitation.

As many of the consumer products we regard as technologically excellent - mobile phones, digital cameras, iPods, satellites, wind turbines, computer chips - are produced in these economies we need to acknowledge that, albeit not across the entire economy, countries like China, India and Russia have indeed emerged on to the world stage.

Their higher growth distinguishes them from us. In these turbulent times annual growth rates are by no means going to be steady but they represent not just growth opportunities but also a new breed of hybrid economy that can sustain discreet dynamic sectors alongside a traditional agrarian economy. It’s time we recognised them as such.

* Jeremy Butler KPMG Associate Partner, High Growth Markets