China itself is a large part of the world economy. As a result, this year it will make a noteworthy contribution to world growth overall. The more challenging question, however, is whether it can make a big contribution to the rest of the world’s growth? China is currently the largest export market for many countries. However, exports are only one component of GDP. Export earnings can, of course, have a ripple effect throughout an economy. But in the case of most economies, domestic spending matters more. Since the crisis, China has shown that its economy can grow even when America’s shrinks. It is not entirely dependent on the world’s biggest economy. But that does not mean it can substitute for it.
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