ABSTRACT
China’s rise as an economic and trading power has been impressive on many levels. This chapter examines the development of the Chinese economy and its remarkable transformation from a minimal effect on the global economy to actively shaping it. In 2011, China officially overtook Japan as the second-largest economy in the world after the United States, and there was much speculation as to when, not if, the Chinese economy would become the largest. As a key stakeholder in the global economy, China must remain pro-active in resuscitating the stalled Doha multilateral trade negotiations, advocate “open regionalism” as a feature of regional trading arrangements, and support a multilateral agreement on investment flows. The Washington Consensus, first articulated by economist John Williamson in 1989, stressed neo-liberal economic policies including a reduction of the public sector, openness to foreign economic competition, fiscal discipline, the sale of state enterprises, and liberalised trade.
