Stephen King, HSBC’s senior economic adviser, has a great
post – Why China’s role as the world’s shock absorber is changing
King correctly notes –
“… in recent years,
China was the world’s “consumer of last resort”, a role more traditionally
played by the US. As many other nations — particularly the US and much of
Europe — embarked on a “great deleveraging”, Beijing provided the
counterweight. As others saved, China borrowed — most obviously through a rapid
expansion of so-called shadow banking.
Had China not
performed this role, the world would have faced a far greater crisis.
Imagine that
Chinese infrastructure investment had not surged. Commodity prices would not
have recovered in the immediate aftermath of the financial crisis. Many
emerging nations would have found themselves short of export revenues and, in
some cases, faced with immediate balance-of-payments crises.”
Related –
Emerging Asia’s dependence on China
http://www.bloombergview.com/articles/2015-08-18/emerging-asia-can-t-just-rely-on-china
http://www.bloombergview.com/articles/2015-08-18/emerging-asia-can-t-just-rely-on-china