China and World Trade

Extract

The revival in global growth in the second quarter of last year can be traced to a sharp rise in domestic demand in mainland China, as well as Hong Kong, Taiwan and South Korea. While GDP increased in Germany, France and Japan as well, growth in these economies relied on a rise in external demand, whereas domestic demand in these countries continued to decline. The rise in Asian domestic demand has been strongly supported by a series of fiscal packages. The scope of stimulus packages introduced in the larger Asian economies dwarfs the size of packages introduced in most European economies, averaging 4–5 per cent of GDP.