China's massive economic importance, in one simple chart

Why China is so important to global economics
(Image credit: Courtesy Business Insider)

American politics still tends to think of China in terms of cheap and plentiful exports, and as the hoarder of the globe's manufacturing jobs. But that industrial boom required enormous raw materials, and it came with a rising middle class that wants stuff.

As Joseph P. Quinlan, a chief market strategist at Bank of America, demonstrated in a recent note to clients, that's made China a key source of global consumption as well — a title our politics tends to bestow on America itself. In fact, China recently overtook the U.S. in terms of how many countries rely on it to buy their exports:

(Graph courtesy of Business Insider)

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

If the recent slowdown in China does spread, this is the route by which it will happen: By depriving the world of the aggregate demand it needs to keep providing enough jobs and rising income to everyone around the globe.

This also clarifies what should worry us about China. Yes, its authoritarianism is wrong. And yes, it would probably be wise to liberalize its markets. But in many ways China faces the same problem as the already-democratic and already-liberalized U.S. and Europe: Whether its socioeconomic order can keep enough purchasing power in the hands of enough ordinary people to maintain aggregate demand.

To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.