Sustaining China's Economic Growth after the Global Financial Crisis
Sustaining China's Economic Growth after the Global Financial Crisis
by Nicholas R. Lardy
 
Sustaining China's Economic Growth after the Global Financial Crisis

Book Data
January 2012
ISBN paper
978-0-88132-626-0
193 pp.
$21.95 $17.56
(20% discount)

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"This is an important and amazingly detailed review of China’s economic policies since around 2004 and of major policy challenges facing the government…vintage Lardy: long on analysis and numbers and (very) short on opinion unsupported by the facts."

Pieter Bottelier, Senior Adjunct Professor of China Studies at Johns Hopkins University, SAIS

"If Nicholas Lardy did not exist, one would feel the need to invent him. ... The main value of this book is in how Lardy paints everything together on one expansive canvas, while at the same time dazzling with some fine analytical brushwork."

Stephen Green, Head of China Research, Standard Chartered Bank

"There is no question more important for the global economy than China and no closer student of Chinese economic policy than Nick Lardy. It follows that this book should be read by anyone concerned with the future of the global economy."

Lawrence H. Summers, former Director of the White House National Economic Council and Charles W. Eliot University Professor at Harvard University's Kennedy School of Government

"Nicholas Lardy is one of most respected American scholars in China because of his admirable works on the Chinese economy. His new book Sustaining China's Economic Growth after the Financial Crisis is a must-read for those who are concerned with China's growth. So far as I have seen, this book is the most comprehensive, detailed, and well-structured account of the turns and twists of the Chinese government's policy in restructuring the imbalanced economy and responding to the global financial crisis in recent years. Nicholas Lardy's defense of China's stimulus program may raise some eyebrows, but his explanation certainly will inspire more in-depth discussions."

Yu Yongding, President of the China Society of World Economics, and former member of the monetary policy committee of the Peoples' Bank of China

"Nick Lardy is one of the most knowledgeable people on China's economy I know. I always take his opinions on China very seriously, and the contents of this book is no exception. I believe it is a must read for anyone interested in today's economic policies in China."

Bill Rhodes, President & CEO, William R. Rhodes Global Advisors, LLC

"In this lucid and meticulous survey, Nicholas Lardy makes a compelling argument that China's famous "imbalances"—stratospheric investment, sluggish consumption, and a world record current account surplus—result essentially from distortions in two fundamental prices: the renminbi exchange rate and the domestic interest rate. . . . Lardy is the master of Chinese economic studies, and his past works have been reliable leading indicators of significant policy turning points."

Arthur Kroeber, editor of China Economic Quarterly


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  • Author Bio
  • Publicity
  • Praise
  • Book Events

The global financial crisis and ensuing economic downturn has raised many questions concerning the future of global economic growth. Prior to the financial crisis, global growth was characterized by growing imbalances, reflected primarily in large trade surpluses in China, Japan, Germany, and the oil exporting countries and rapidly growing deficits, primarily in the United States. The global crisis raises the question of whether the previous growth model of low consumption, high saving countries such as China is obsolete. Although a strong and rapid policy response beginning in the early fall of 2008 made China the first globally significant economy to come off the bottom and begin to grow more rapidly, critics charged that China's recovery was based on the old growth model, relying primarily on burgeoning investment in the short run and the expectation of a revival of expanding net exports once global recovery gained traction. Critics, however, argued that as government-financed investment inevitably tapered off, the likelihood was that global recovery would not be sufficiently strong for China's exports to resume their former role as a major contributor to China's economic expansion. The prospect, in the eyes of these critics, is that China's growth will inevitably falter. This study examines China's response to the global crisis, the prospects for altering the model of economic growth that dominated the first decade of this century, and the implications for the United States and the global economy of successful Chinese rebalancing. On the first it analyzes the strengths and weaknesses of China's stimulus program. On the second it analyzes the nature of origins of the imbalances in China's economy and the array of policy options that the government has to transition to more consumption-driven growth. On the third successful rebalancing would mean that more rapid growth of consumption would offset the drag on growth from a shrinkage of China's external surplus. Successful rebalancing would mean China would no longer be a source of financing for any ongoing US external deficit. From a global perspective China would no longer be a source of the global economic imbalances that contributed to the recent global financial crisis and great recession.

Book Release Event

Contents
Selected chapters and sections are provided for preview only and are nonprintable.

Preface

Acknowledgments

Introduction [pdf]

1. China's Response to the Global Crisis [pdf]

2. Imbalances and Their Implications for China's Economy

3. Policies for Rebalancing Economic Growth

4. China and Global Economic Rebalancing [pdf]

5. The Politics of Economic Rebalancing

Appendix A Statistical Issues

References


Index [pdf]

Nicholas R. Lardy
Nicholas R. Lardy, called "everybody's guru on China" by the National Journal, is the Anthony M. Solomon Senior Fellow at the Peterson Institute for International Economics. He joined the Institute in March 2003 from the Brookings Institution, where he was a senior fellow from 1995 until 2003. He served at the University of Washington, where he was the director of the Henry M. Jackson School of International Studies from 1991 to 1995. From 1997 through the spring of 2000, he was also the Frederick Frank Adjunct Professor of International Trade and Finance at the Yale University School of Management. He is author, coauthor, or editor of Sustaining China's Economic Growth after the Global Financial Crisis (2012), The Future of China's Exchange Rate Policy (2009), China's Rise: Challenges and Opportunities (2008), Debating China's Exchange Rate Policy (2008), and China: The Balance Sheet—What the World Needs to Know Now about the Emerging Superpower (2006). He is a member of the Council on Foreign Relations and a member of the editorial boards of the China Quarterly, China Review, and Journal of Contemporary China.

Review—Sustaining China's Economic Growth
Review in e-international Relations
March 11, 2013

Les vices cachés de la croissance [pdf]
Review in Alternatives Internationales
December 2012

Advice for China's New Guard
The Washington Post
November 7, 2012

Lardy vs. Pettis: Debating China's Economic Future, Round 2
Write-in debate in the Wall Street Journal
November 7, 2012

Lardy vs. Pettis—Debating China's Economic Future
Write-in debate in the Wall Street Journal
November 2, 2012

Fact Check: Obama, Romney China Ads
CNN video: Nicholas R. Lardy sets the facts straight about China in the latest Romney and Obama campaign ads.
September 24, 2012

China's Lost Decade
Book review by Ian Johnson in the New York Review of Books
September 2012

The Chinese Growth Model Before and After the Financial Crisis
Op-ed by Nicholas R. Lardy in the Montreal Review
July 2012

Nicholas Lardy on Rebalancing the Chinese Economy
Video interview at the Cheung Kong Graduate School of Business
June 11, 2012


Sustaining China's Economic Growth After the Global Financial Crisis

Video interview for ChinaFile
June 2012

Sustaining China's Economic Growth After the Global Financial Crisis
Review in Foreign Affairs by Richard N. Cooper
May/June 2012

Peterson's Lardy Sees Underlying 'Financial Repression' in China
Interview with Nicholas R. Lardy in Bloomberg Brief
May 4, 2012

The Imbalances in China's Economy
Interview in the New York Times Economix
April 11, 2012

China's Economic Future and Its Implications for the United States
Interview with the Chicago Council on Global Affairs
March 14, 2012

Can China Get Its Prices Right? [pdf]
Review in China Economic Quarterly by Arthur Kroeber
March 2012

China Is Right to Open Up Slowly
Review in the Financial Times by Martin Wolf
February 28, 2012

China's Rebalancing Will Not Be Automatic
Op-ed in East Asia Forum by Nicholas R. Lardy
February 22, 2012

Chinese Economic Growth Requires Restructuring Economy
Review in the Epoch Times
February 16, 2012

China Central Television (CCTV) Interview
February 6, 2012

Chinese Economic Reform, Full Front and Centre
Review in East Asia Forum by Peter Drysdale
February 6, 2012

Sustaining Economic Growth in China
Op-ed in East Asia Forum by Nicholas R. Lardy
February 5, 2012

China Review News
Review: 伯格斯滕語中評:匯率是美中大問題
February 4, 2012

China Must Reform to Maintain High Levels of Economic Growth
Op-ed in Public Service Europe by Nicholas Lardy
February 3, 2012

China's Economic Reforms Take on New Urgency, Analyst Says
IIP Digital, US Department of State
February 3, 2012

China Needs to Continue Economic Reforms for Sustainable Growth
ChinaDaily.com
February 2, 2012

China – Masterclass: Nick Lardy and the Consumption Thing [pdf]
Review in Standard Chartered
Posted with permission from Standard Chartered Bank
January 30, 2012

Peterson's Lardy Discusses China's Growth [mp3]
Interview with Bloomberg
January 25, 2012

Sustaining China's Economic Growth after the Global Financial Crisis
Review in the Financial Times
January 22, 2012

China Can't Grow Its Way Out of a European Recession
Review in Fortune
January 19, 2012

Eight Questions: Nick Lardy, 'Sustaining China's Economic Growth'
Review in Wall Street Journal China Real Time Blog
January 16, 2012

Appearance on CNBC Asia Squawk Box
January 11, 2012

Is a Chinese Economic Slump on the Horizon?
Washington Post article by Robert Samuelson
January 8, 2012

Lardy Documents Impact of Chinese Rebalancing on US Economic Prospects
Inside US-China Trade News Brief
January 4, 2012

"This is an important and amazingly detailed review of China’s economic policies since around 2004 and of major policy challenges facing the government…vintage Lardy: long on analysis and numbers and (very) short on opinion unsupported by the facts."

Pieter Bottelier, Senior Adjunct Professor of China Studies at Johns Hopkins University, SAIS

"If Nicholas Lardy did not exist, one would feel the need to invent him. ... The main value of this book is in how Lardy paints everything together on one expansive canvas, while at the same time dazzling with some fine analytical brushwork."

Stephen Green, Head of China Research, Standard Chartered Bank

"There is no question more important for the global economy than China and no closer student of Chinese economic policy than Nick Lardy. It follows that this book should be read by anyone concerned with the future of the global economy."

Lawrence H. Summers, former Director of the White House National Economic Council and Charles W. Eliot University Professor at Harvard University's Kennedy School of Government

"China does not get special dispensation from the rebalancing imperatives that all major economies face in this post-crisis era. Nick Lardy sheds considerable insight into the critical Chinese piece of this agenda—detailing the financial and currency reforms that will be required for the long-awaited transition to a pro-consumption growth dynamic. This book will undoubtedly elevate the debate over China's global economic impact."

Stephen Roach, Yale University, Non-Executive Chairman Morgan Stanley Asia

"Nicholas Lardy is one of most respected American scholars in China because of his admirable works on the Chinese economy. His new book Sustaining China's Economic Growth after the Financial Crisis is a must-read for those who are concerned with China's growth. So far as I have seen, this book is the most comprehensive, detailed, and well-structured account of the turns and twists of the Chinese government's policy in restructuring the imbalanced economy and responding to the global financial crisis in recent years. Nicholas Lardy's defense of China's stimulus program may raise some eyebrows, but his explanation certainly will inspire more in-depth discussions."

Yu Yongding, President of the China Society of World Economics, and former member of the monetary policy committee of the Peoples' Bank of China

"Nick Lardy is one of the most knowledgeable people on China's economy I know. I always take his opinions on China very seriously, and the contents of this book is no exception. I believe it is a must read for anyone interested in today's economic policies in China."

Bill Rhodes, President & CEO, William R. Rhodes Global Advisors, LLC

"Lardy's book is a masterful account of the policy reforms that China needs to put in place to rebalance its economy and sustain high growth. The book is rich in data and thoughtful analysis, making it essential reading for anyone interested in understanding China's growth prospects."

Eswar Prasad, Brookings Institution

"In this lucid and meticulous survey, Nicholas Lardy makes a compelling argument that China's famous "imbalances"—stratospheric investment, sluggish consumption, and a world record current account surplus—result essentially from distortions in two fundamental prices: the renminbi exchange rate and the domestic interest rate. . . . Lardy is the master of Chinese economic studies, and his past works have been reliable leading indicators of significant policy turning points."

Arthur Kroeber, editor of China Economic Quarterly

"...Nicholas Lardy's excellent new book on the Chinese economy…should make it harder than ever for analysts to neglect the importance and the complicated consequences of financial repression on Chinese growth."

Michael Pettis, Senior Associate, Carnegie Endowment for International Peace

     
Location Date Description
Washington, DC May 1, 2012 Policy Conversation sponsored by the Brookings Institution and Caixin Media at the Cosmos Club
New York City April 10, 2012 N.T. Wang Distinguished Lecture at Columbia University
San Francisco March 28, 2012 Federal Reserve Bank of San Francisco–Asia Society event
Video
More info
Seattle, WA March 27, 2012 Lecture at the University of Washington
Los Angeles March 26, 2012 Federal Reserve Bank of San Francisco–Asia Society event
Beijing March 21, 2012 Book events:

European Union Chamber of Commerce in China (breakfast)

American Chamber of Commerce (lunch)

Foreign Correspondents Club (4:30–6:00 pm)
Chicago March 14, 2012 Book Event at the Chicago Council on Global Affairs
New York City February 28, 2012 Book Event at the Council on Foreign Relations
New York City February 27, 2012 National Committee on United States–China Relations, Jones Day China Lecture Series
Washington, DC February 22, 2012 SAIS China Forum: Sustaining Economic Growth in China
Video [requires Windows Media Player]
Stockholm, Sweden February 13, 2012 Stockholm China Forum sponsored by the German Marshall Fund of the United States
Washington, DC February 1, 2012 Book release event, Peterson Institute for International Economics
Washington, DC January 18, 2012 US-China Business Council: Forecast 2012
New York City January 12, 2012 Asia Society: Assessing the Impact of US Debt to China
Fung Global Institute, Hong Kong December 21, 2011 Short video: Understanding China's Economic Imbalances
University of Hong Kong December 15, 2011 Edward K. Y. Chen Distinguished Lecture, "Can China Sustain Rapid Economic Growth?"
Chicago December 7, 2011 DTN/The Progressive Farmer 2011 Ag Summit: Rebalancing Risk and Reward
New York City December 9, 2011 The Economist Festival: The World in 2012

December 9, 2011
Nicholas R. Lardy delivers his predictions for China in 2012 at the Economist's World in 2012 Festival. His session included Alice Lyman Miller, Hoover Institution at Stanford University; James Mulvenon, Center for Intelligence Research and Analysis; and Carl Walter, coauthor of Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise. The discussion was moderated by Tom Easton, US finance editor for the Economist.