Deeply involved within the highly interconnected flows of today’s global economy, China has not been spared by the financial meltdown spreading from the US since late 2007, witnessing in particular a dramatic short-term drop in its export capacity, which has caused painful business shutdowns and job losses. Migrant workers and young graduates have been hit with particular severity.
Whereas Beijing’s government has managed to contain the direst effects of the crisis by launching a huge stimulus plan in 2009, the global downturn seems to have taught China some hard lessons: not only is its export-led development model less and less sustainable, but internal inequalities be-tween different regions and parts of population risk engendering serious social tensions in the face of economic slowdowns or price surges.
In the persistently weak global environment, the only credible solution to avoid both dangers – this analysis argues – is for China to shift towards a more balanced growth pattern, by sustaining domestic demand, expanding the social safety net and tackling unjustified internal inequalities.