Chinese–US Economic Relations After the Global Financial Crisis

The global financial crisis has had three profound effects on Sino–American relations. First, China and the United States have become a de facto Group of Two (G2), largely by default, as Europe and Japan have fallen on even harder times than the United States and because India’s development path is at least 15 years behind China’s. Second, the speed with which China is catching up to the United States has increased, with the mid-2020s projected as when China will pass the United States to become the world’s largest economy—though it will then still be a much poorer and less powerful country than the United States. Third, the global financial crisis (GFC) did not—as some projected—reduce the enormous economic imbalances between China and the United States even as both countries reduced their imbalances with the rest of the world.