China And The Global Financial Crisis

A still semi-closed financial system has isolated China in large degree from the turmoil in global financial markets. But it is not immune from the potential knock-on effects of a serious economic slowdown, or worse, in it key American and European export markets. So it is making a virtue of necessity by saying it will seek to expand its internal market, the main policy outcome of a four-day meeting of the Party’s Central Committee.

Making the economy more oriented to domestic demand is necessary anyway for the long-term development of the economy. Plus the party’s top bosses can twin the policy with a plan to double rural incomes by 2020, a political imperative for a leadership threatened by the widening wealth gap between the cities and the countryside.

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