Chinese Economic Growth and Prospects of a New International Monetary Regime

Abstract

The chapter focuses on the rapid growth of China’s economy and assesses the likelihood of China ending the US dollar standard. In doing so, it raises key issues at the heart of the Chinese economy, particularly following the Great Financial Recession of 2008, whilst evaluating the Chinese states’ capacity to address them. Overall it argues that while the Chinese economy is dependent on US dollars, its mid-to-long term goals are surely to significantly reduce this dependency so that the economy can transition to one primarily driven by consumption and thus avoid the so-called “middle-income trap”. Given this, the chapter argues that an end to the dollar system is, in fact, in sight.