Photo Source Jakob Montrasio | CC BY 2.0
It is 10 years in September since Lehman Brothers went bankrupt bringing global capitalism to the point of collapse. Although the crash did not finally lead to a total meltdown, it triggered a slump of 1930s proportions and for most economies the last decade has been a lost decade of low growth, low investment, low productivity, marked by debt and deficit, with virtually no improvement in real incomes for the 90 per cent.
The stand-out story of the period has to be the continuing rise of China. Initially, the economy was also badly hit by the crisis, but China was able to recover rapidly to emerge today as a major economic power, moving steadily closer centre stage in the global order.
Since 2009, the Chinese economy has nearly tripled in size, from $4,600 billion to over $12,000 billion in 2017, overtaking Japan by 2011 for the world number 2 position. Growth at 9-10 per cent a year was rapid up to 2011, settling down over the last 6 years to a more sustainable ‘new normal’of around 7 per cent a year, still well above the world rate at 3.9 per cent.
Per capita income has grown from $3,500 in 2009 to $8,800 in 2017, a rate of between 10-15 per cent a year, putting China on course to join the ranks of the high income countries in 8 years time. The urban population has grown by some 15 million a year with China creating 8-10 million jobs annually. In 2017, there were 11 million new jobs compared to India’s 1…