China’s arrival on the world scene in the 1990s was the largest part of globalization. It brought many benefits worldwide: lower prices to Western consumers, large profits to multinationals, huge windfalls to commodity-rich countries, and employment and strong export growth to China. China’s emergence as a major global supplier and trader helped to create a boom which brought global growth with lower inflation and, for a time, an illusory stability, and also made China into the largest financer of the developed world.
But Western politicians, regulators and bankers, their vision limited by national boundaries, did not understand at the time the true causes of the global economic boom of the Millennium. They attributed it largely to a revolution in risk management and their own wise policies. China and the Credit Crisis argues that if the role played in the new prosperity by globalization and an emerging China had been better understood, more appropriate policies and actions may have been adopted by central bankers and regulators which could have avoided the financial crash in 2008, or at least greatly limited its impact.
China and the Credit Crisis goes on to examine the larger role that China will continue to play in a post-crisis world.