During three decades of favorable global economic conditions, China created an integrated global production system unprecedented in scale and complexity. But now its policymakers must deal with the triple challenges of the unfolding European debt crisis, slow recovery in the US, and a secular growth slowdown in China’s economy.
HONG KONG – During three decades of favorable global economic conditions, China created an integrated global production system unprecedented in scale and complexity. But now its policymakers must deal with the triple challenges of the unfolding European debt crisis, slow recovery in the United States, and a secular growth slowdown in China’s economy. All three challenges are interconnected, and mistakes by any of the parties could plunge the global economy into another recession.
To assess the risks and options for China and the world, one must understand China’s “Made in the World” production system, which rests on four distinct but mutually dependent pillars.
The first of these pillars, the China-based “world factory,” was largely created by foreign multinational corporations and their associated suppliers and subcontractors, with labor-intensive processing and assembly carried out by small and medium-size enterprises (SMEs) that have direct access to global markets through a complex web of contracts. Starting modestly in coastal areas and special economic zones, the “world factory” supply chain has spread throughout China, producing everything from stuffed animals to iPads.
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One year after the fall of Kabul and the Taliban’s return to power, Afghanistan is in dire straits, and America and the broader West have yet to conduct a proper post-mortem of the policy failures there. Worse, Russia appears to have taken the US withdrawal as an invitation to launch a new war of its own.
revisits the fall of Kabul to consider its implications for America and the world, one year later.
With surging inflation and a new war in Europe, the first half of 2022 was understandably gloomy for economies and financial markets around the world. But recent developments offer some hope that the prevailing pessimism may no longer be as warranted as it was a few months ago.
gives four reasons for questioning whether economic forecasters' current pessimism is still justified.
HONG KONG – During three decades of favorable global economic conditions, China created an integrated global production system unprecedented in scale and complexity. But now its policymakers must deal with the triple challenges of the unfolding European debt crisis, slow recovery in the United States, and a secular growth slowdown in China’s economy. All three challenges are interconnected, and mistakes by any of the parties could plunge the global economy into another recession.
To assess the risks and options for China and the world, one must understand China’s “Made in the World” production system, which rests on four distinct but mutually dependent pillars.
The first of these pillars, the China-based “world factory,” was largely created by foreign multinational corporations and their associated suppliers and subcontractors, with labor-intensive processing and assembly carried out by small and medium-size enterprises (SMEs) that have direct access to global markets through a complex web of contracts. Starting modestly in coastal areas and special economic zones, the “world factory” supply chain has spread throughout China, producing everything from stuffed animals to iPads.
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As a registered user, you can enjoy more PS content every month – for free.
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