What the U.S. Can Learn From China’s Economic Recovery

Howard W. French 

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The last time the global economy cratered, in the fall of 2008 in the wake of an American banking crisis, it was China that set the pace—both in insulating itself from most of the damage, and in generating enough new demand in its own economy to prevent a far worse downturn than the already terrible recession suffered in much of the rest of the world.

Even now, years later, the scale of China’s response back then is poorly understood. As the economic historian Adam Tooze recounted in his 2019 book, “Crashed: How a Decade of Financial Crises Changed the World,” the Chinese state directed roughly $1.2 trillion in stimulus between 2010 and 2012 at just one modest-sized province—Hubei, with a population of 57 million people, modest by China’s standards. “Taken at face value,” Tooze writes, “this meant that a single Chinese province with a population the size of the UK and a GDP the size of Greece was engaging in a program of investment larger than any stimulus ever attempted in the United States.” .