From the early 1980s until 2005, China was arguably the world’s greatest beneficiary of trade liberalisation. But the 2008-09 global financial crisis reversed its role. China went from being a global “taker” – drawing on external demand to support its economy – to being a global “maker” – generating incremental output to support a world facing a profound shortfall of aggregate demand.
Indeed, China’s strong economic growth was the only thing that prevented a fragile post-crisis world from slipping back into recession.
As a result of this role reversal, China deservedly earned a reputation as an engine of global economic growth, especially in the decade following the GFC. China accounted for fully 32 per cent of cumulative growth in world GDP from 2010 to 2019, compared to 24 per cent from 2000 to 2008. China’s strong economic growth underpinned a sharp increase in…
