The 3 Acts Of The ‘China Shock’Apr. The rising living standards that have come with China’s opening in the 1980s initially urban forex fxi widespread support to the view of trade as a key engine of economic growth, North and South.
Improvements in the range and quality of exports, greater technological dynamism, better prospects for doing business, a larger consumption base, and cheaper consumption goods – all these factors have created substantial welfare benefits for OECD countries. The rise of China has been shown to be a boon for low- and middle-income countries during the 2000s, benefitting both commodity exporting and non-commodity economies2. As a result, the impact of China’s growth on both the low- and middle-income countries has grown significantly, while the impact of OECD countries has significantly declined. The ‘China Shock’ Instead of taking satisfaction in global economic development, economic growth in China and the South is regarded by some as a threat. In contrast to the conventional view of globalisation as a win-win setting, recent studies on the ‘China shock’ focus on the job reducing effect of surging imports from China on the US labour market.
The former mainstream consensus that trade could be strongly redistributive in theory but was relatively benign and frictionless in practice has not only been challenged by US evidence3. 4 dwell on the shock of surging imports from China over the past three decades as a structural driver of divergence in economic performance across U. 6 trace the substantial adjustment costs and distributional consequences of trade, most discernible in the local labour markets in which the industries exposed to foreign competition are concentrated. The ‘China shock’ literature does not suggest protectionism but risks being exploited. While unemployment in certain sectors or regions in OECD countries has resulted to a large extent from technological changes rather than from trade, the two drivers are not always easily disentangled. In the OECD countries, both globalization and technological change affect a middle class that is often marked by industry, which has lost its good jobs or is afraid of imminent job losses.