The Role of China in Asia's Evolution to Global Economic Prominence

Abstract

The objective of this article is to show how China's rapid growth was instrumental in integrating Asian economies with each other and mutually supporting rise of a dynamic Asia. It demonstrates the thorough structural transformations that the Chinese and Asian economies underwent over the last three decades. In a short span of three decades Chinese economy made a sizeable regional and global niche for itself. China's vertiginous growth became instrumental in integrating the real economies in the region. China and the neighbouring Asian economies influenced and shaped each other's economic evolution. Trade, foreign direct investment (FDI) and vertically integrated production networks were the principal channels of market-led integration. China's rise as a regional economic power, before becoming a global one, was a substantially significant economic event. A defining moment in China's economic relationship with its Asian neighbours was the outbreak of the regional financial crisis in 1997-98. Similarly when the global financial crisis (2007-09) struck, China's macroeconomic fundamentals were strong, and it helped propel regional growth. In several other important ways, China sways not only the regional economies but also the global economy.