China Unscathed Through the Financial Crisis

China's unique economic environment has allowed it to ride through the recent financial crisis relatively unscathed.

Singapore - China's unique economic environment has allowed it to ride through the recent financial crisis relatively unscathed. According to a study in China and World Economy published by Wiley-Blackwell, China should be able to offset the adverse impact of external shocks, putting the economy back on track to resume its strong economic growth.

The study entitled "China: Unscathed through the Global Financial Tsunami" investigates the reasons behind the resilience of China's economy to the global financial tsunami and provides a detailed analysis of the factors that will drive its economic recovery.

"Unlike many other economies, China's financial, household, public and external sectors are lowly leveraged, giving it strong economic foundations to weather through the global financial crisis. In fact, there is plenty of room for Chinese households, banks and the government to increase their leverage ratios, which is crucial factor to the economic recovery", said author Mingchun Sun, Chief China Economist, Nomura International (HK) Limited, Hong Kong.

The study finds that the main cause of the China's sharp economic slowdown in late 2008 was due to massive destocking, rather than falling exports. Mainly driven by domestic demand for the past two decades, China's economy is expected to resume its strong uptrend even without an export recovery.

Sun adds, "Although China cannot completely escape the global downturn, its solid economic fundamentals should cushion it from a hard landing. We expect the V-shaped recovery to last until the first quarter of 2010, and a sustained economic recovery in China till 2011, with real GDP growth exceeding 10 percent in 2010."

This article is published in the China & World Economy (Vol. 17, Issue 6, pp. 24-42).

Media wishing to receive a PDF of the full study should contact Alina Boey, Senior Manager, Corporate Communications at or phone 65-96565580.

About China & World Economy
China & World Economy was launched in 1993 by the Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS). Originally self-published, the journal begins its official publishing partnership with Blackwell Publishing in 2006. Published six times a year, this journal combines original academic research works with policy review articles - many of its authors are distinguished Chinese economists from both academic and governmental circles. As the only English language journal in China devoted to the topic of Chinese economics, readers can expect objective, analytical and up-to-date quality content. With distinguished contributors such as economists from both the government and academic circles, the journal will provide an informed and balanced window on China, and will undoubtedly become essential reading for all those interested in China's development.

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