The wild recession hit the entire world in 2008 and went on shaking the pillars of western financial systems, testing the reliability of economic systems in so called “developed countries”. Millions of people lost their jobs, small and mid-sized companies pulled out their investments and big companies dropped down their expansion plans, all contributing to a scary phase of world economy. This was the time when the economical system of China came into lime light, stopping the wild waves of recession at its boundaries. Global economic crisis never affected china. Instead, this was the time when the country gained prominence in the global economic picture; by securing 10% steady annual growth during the year 2007-2011.
For several decades, the economy of china was under the Mao’s “bamboo curtain”, stifled from the entire world. Though, it was not mentioned after Nixon’s visit to china in 1972, the People’s Republic of China had become the second largest trading partner of United States with a turn over of $273 billion in 2010. Today, 4 out of 10 largest banks in the world are Chinese, based upon market capitalization. Shanghai Stock Exchange that was silent till the start of 20th century with just $0.3 trillion capitalization witnessed miraculous growth by 2010 with $2.7 trillion capitalization. Let’s not forget that this was the time when the global economic crisis were at there worst stages.
In 2010, Shanghai Stock Exchange became world’s fifth largest stock exchange in the world. When the export markets of almost all the countries were down, china was doing a fair business in this department as well by portraying a robust growth in its export rate. This extra-ordinary performance of Chinese financial system showed way to the entire world.
In our later posts, we will discuss about the economical condition of other countries during recession.