China: Motor or Brake of Global Growth?

Abstract

Perhaps more than any other, China’s economic juncture is observed and discussed — quarter to quarter, month to month, even day to day. It’s easy to understand why, being the world’s second largest economy. But this uncommon interest not always allows a better understanding of China’s contribution to global growth. This article discusses the juncture of China at the start of 2014, considering both the domestic factors— the economic goals and policy decisions of the Chinese government, which came to power last year —as the external environment— still dominated by the aftereffects of the Great Recession. It concludes that —through increasing imports and direct investment abroad— China will continue acting as one of the mayor tail-wind factors for world’s economic activity, perhaps the most significant in the second half of the present decade: the flat teens.