Title: U.S.-China trade war has its seeds in the financial crisis
Headings: U.S.-China trade war has its seeds in the financial crisis
U.S.-China trade war has its seeds in the financial crisis
David Dollar
Senior Fellow - Foreign Policy, Global Economy and Development, John L. Thornton China Center
Growth machine
The debt equation
Urging openness
How we got here
Order from Chaos

Content: China restored its GDP growth rate very quickly, but still the crisis has had a lasting effect on the economy and on U.S.-China relations. David Dollar
Senior Fellow - Foreign Policy, Global Economy and Development, John L. Thornton China Center
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In many ways, the seeds of the current trade war were sown in the financial crisis. The crisis had lasting impact by accelerating China’s catch-up with the United States, undermining U.S. fiscal strength, and slowing down China’s reform and opening. Growth machine
China was growing rapidly before the financial crisis; in many ways the years immediately after China joined the World Trade Organization (WTO) in 2001 were the golden age of Chinese growth. Exports were expanding at more than 20 percent per year and GDP growth reached as high as 14 percent in 2007. Still, China was a small player in the world economy. U.S. GDP was 400 percent larger than China’s in 2006, measured in current dollars. It was always likely that a reforming China would gradually catch up with the United States, but the crisis greatly accelerated the process. With its massive stimulus, China quickly rebounded to double-digit growth rates.