Global trade was a win-win situation for all, that is, till the global economic crisis set in. Now, with most of the rich countries increasingly becoming protectionist, it has started shrinking and according to the World Trade Organization (WTO), could go down nine percent this year. The crisis has hit the world’s largest economy America hard and in the process, led to a tectonic shift in consumer spending. This shift has come as a severe blow to China, as its exports to America have contracted by 33 percent this year, pulling the America-China trade down by $1.5 trillion, writes The Washington Post.
If we juxtapose president Obama’s comments at the G20 summit in April this year that the U.S. couldn’t be “world’s consumer” and be “the sole engine of global growth,” with these statistics and changing American consumer behavior, the picture is rather gloomy for China.
But they don’t seem to care. In his recent speech at the Beijing University, they “snickered” at Treasury Secretary Timothy Geithner when he told Chinese investors that their dollar investments were safe. Don’t they realize that there are “interesting” times ahead for them? With a billion-plus population and a huge workforce to contend with, how would it manage when the sharp decline starts hurting its economy in a big way? How long would it then be able to sustain itself, and more importantly, prevent a revolt? Could it not witness Tiananmen Square II that would be more deadly than the earlier one? If the one that happened 20 years was led by students, this year it could well be enraged workers bursting out their anger at the authoritarian regime.