Brasil e China no Reordenamento das Relações ... - Funag

china economic developments, prospects and lessons
II. China During and After the Global Financial Crisis
A review of the many dimensions of China’s crisis experience finds
that by confronting crisis challenges head-on, China was able to speed
up both its market reforms and the reshaping of its economic structure.
The crisis’ relatively mild financial impact made these adjustments easier
than they otherwise would have been.
Because China has a managed capital account with relatively strict
controls on short-term capital flows, the distress, if not collapse, of
financial institutions worldwide did not extend to China’s domestic
economy. The crisis did affect China’s trade volumes, as it did for virtually
all countries. Financial aspects of the crisis only affected China indirectly
through their damage to trade finance. Letters of credit necessary for the
short-term support of everyday exports and imports became unavailable
as a result of contagion from the collapse of the global financial services
firm Lehman Brothers in September 2008. Hong Kong and mainland
authorities cooperated at that time to provide emergency finance for
trade transactions with steps that before long sped up the expansion of
the RMB’s international financial role.
Two entirely domestic developments in the 2007-08 period
complicate investigation of the crisis influence on China. First, beginning
in early 2007, China had introduced a pilot program to restructure its
manufacturing sector away from low-end small scale operations, many
owned by Hong Kong and Taiwan businesses. By the middle of 2008,
this program – not the crisis – had caused plant closing all over the
south coast’s Pearl River delta, resulting in large scale migrant worker
layoffs. Leadership in the southern province of Guangdong protested
the closings, layoffs and loss of tax revenue. When the financial crisis
struck late in 2008, Beijing authorities nevertheless used the opportunity
to finalize the restructuring program, recasting the layoffs and closings
as consequences of global crisis influences.
Second, by 2007 China’s inflation had returned to worrisome
levels, and late in that year national authorities implemented a dramatic
financial tightening program with especially harsh treatment of the real
estate development industry. The tightening program worked, but it was
continued for too long, stretching into the third quarter of 2008, resulting
in a noticeable slowing of GDP growth in the second quarter, before
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