Partners and Rivals

When the financial crisis hit the world in 2008, whole countries were plunged into despair and frustration – but not China. In fact, the collapse of the developed economies allowed China to rise to new heights of economic and political power.

And now, China is about to become the world’s most powerful economy.

The 2000s were China’s decade. During that period, the United States, Japan and Germany all went through slumps, their annual growth rate seldom rising above two percent, while China's economy continuously grew at a staggering rate of ten percent.

Even before the financial crisis, specialists were predicting that China would overtake the United States as the world’s biggest economy by 2041. But due to the crumbling financial markets and debt explosion of the 2008 collapse, it is now believed that China will overtake the United States by 2026.

China is also taking a frontline position in world trade. Its $2 trillion trade with its top six trading partners takes up eight percent of total international trade. And here begins our US–China saga: the United States is the country’s most important market by far, with as much as 18 percent of all US imports coming from China.

Now China is turning this economic weight into political influence.

In response to the financial crisis, the entire global community came together to seek solutions. With that purpose in mind, the Western-dominated G7 was replaced by the G20 summit of the biggest 20 economies. This enabled China, which had previously been sidelined, to take a leading role in directing global economic policy. And recently China has increased their influence over the International Monetary Fund (IMF) – one of the most important financial institutions in the world – currently holding the third highest voting rights in the organization.