China's
Allocative Efficiency decision 25 years ago has moved it from an agrarian economy ("Consumer Goods") to an industrialized one ("Capital Goods"). It has utilized its resources over this time period to increase its productive capacity by investing in public and private infrastructure (roads, bridges, power capacity, factories, etc), attracking business to become the world manufacturing floor, and educating the current generation of leaders (govt and business)...
From The Economist: CHINA’S rise has long appeared inexorable. Despite a decline in total world trade, China has seen its exports fall less than those of other big powers. A new report by the World Trade Organisation calculates that the total value of merchandise exports fell by a staggering 23% in 2009. Among the top ten exporters, Japan’s shipments were worst affected (falling by 26%). Although China's exports also fell (by 16%), the contraction was less painful than in Germany (down by 22%). As a result China is now the single largest exporter. The global downturn has helped to reduce global imbalances; the leading three exporters accounted for 26.7% of total world exports in 2009 down from a third of the total in 2008. The WTO expects trade to rebound by nearly 10% this year.
In retrospect, the 2009 financial crisis did hit the global economy far worse than anyone ever imagined. No country with its behemoth economy stood strong against the waves. But the good thing about all of this was that, as mentioned, it poised to equalize the global players. Now that the economy has been going strong again, let's embrace the tide and ride with the rebound.
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