ABSTRACT
This chapter discusses how China reacted to the global economic crisis, especially after the collapse of Lehman Brothers in 2008. It focuses on the basis of China's swift rate of economic growth and examines how the financial crisis impacted on China's exporting industries before. It tries to evaluate how effectively the Chinese authorities responded to the ensuing economic difficulties through its monetary and fiscal policies. China remains a one-party state under the Communist Party whose view is to create a harmonious society in which there is little separation between politics, economics and social welfare. The Open Door policy of 1978 led to what is best considered as a form of economic dualism. The most common explanation offered for the severe impact of the recession on the export sector is that China's economy and in particular the manufacturing sector suffered from excess capacity.
