part x - the dominant causes of the credit crisis: the threat of china’s bulging exports

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1 Part X - The Dominant Causes of the Credit Crisis: The Threat of China’s Bulging Exports By David Collett China - The Rise of an Economic Giant Foreign Direct Investments (FDI) in China The Impact of Exchange Rates on China’s trade with United States and Europe The Unsustainability of China’s huge Trading Surpluses  The growth of the Chinese economy over the last two decade is astonishing by any standard. At the current rate of expansion, China would double its economy every 7 to 8 years while most developed economies can only hope to achieve the same feat every 25 to 30 years. China’s rate of growth is unprec edented and it defied many predictions of its eminent demise over the last decade – at least until now. It has led to a belief that its near miraculous growth can continue indefinitely. If it does, the text books on economics will soon be rewritten. Many economists and market commentators who champion free market capitalism sing the praises of the Chinese economy, often expressing their confidence that the Chinese government will do whatever is needed to keep the ship on course or to ensure a soft landing, if and when the economy deflates. In fact, any sign of stagnation in the Chinese economy is regularly considered as good news by some as there is the assumption that it would compel the Chinese authorities to act in some stimulatory fashion causing faster growth. In contrast, they are very critical of any government interference in developed countries’ economies – mostly on the grounds that

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Page 1: Part X - The Dominant Causes of the Credit Crisis:  The Threat of China’s Bulging Exports

8/3/2019 Part X - The Dominant Causes of the Credit Crisis: The Threat of China’s Bulging Exports

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