China and the Credit Crisis: The Emergence of a New World Order

Foreword

What role did China play in generating the current global financial crisis? In this book, Giles Chance argues that China did not cause the crisis; but without China, the crisis would not have happened. I think his argument is right. The integration of China into the global economy has fundamentally changed the global market structure and financial order. Nevertheless, China’s impact has not been well understood and appreciated by academia and policymakers worldwide. In some sense, it is this ignorance of China’s new role that misled both the American and the Chinese policymakers in setting their macroeconomic policies, particularly monetary policies, which in turn caused global imbalance and the financial crisis. Now it is time to have a right idea of China and the global economy.

I have known Giles Chance for over 20 years, since I met him when I was completing my doctorate at Oxford University in England. Giles has written his book China and the Credit Crisis: The Emergence of a New World Order at a good time. China stands at the entrance to a new era. As Giles suggests, the credit crisis has changed the balance of global financial power. This has altered, and in some ways strengthened, China’s global position. Giles analyzes this new situation in his book, which I think is the first one to cover this subject directly and in some depth. The issues he discusses are all important: China’s role in the credit crisis; the effect of the crisis on China; the future role of ...