The article ‘Beware China and the Business Cycle’ featured in The Financial Review discusses the potential impacts of China’s slowing growth rates on the global environment. The issue is that the Chinese economy has become a significant world player and “the evolution” of its business cycle will have severe knock-on effects on the rest of the world economy, particularly in Australia. The article highlights the economic implications of China’s slowing growth rates as Australia’s most important trading partner; for example Boyd reports that China’s imminent economic performance “will have a direct bearing on the Australian dollar” which is a “proxy for investment in developing Asia”. Boyd also argues that “Australia is at stake...if China’s economy stumbles” because China is a major investor in Australian resources and infrastructure. Boyd emphasises that due to Chinese demand for Australian commodities, a downturn in the US economy no longer has an immediate impact on the Australian economy. Further, of global lending, Boyd says that “banks are still pumping money into China” because they are heavily relying on the “Chinese miracle economy” to grow for some time. The article reports that high-inflation and a decrease in money supply are causing the Chinese economy to contract. As China is a globalising economy, these contractionary factors have implications not only for China, but for global economies.
The reported downturn of China’s economy relates to aspects of CISS2001. This particular case demonstrates that a nation’s transformation from a centralised, closed economy into an open one intensifies interdependence between economies in the world market. The global significance of this case is China’s export-led growth (Morrison, 2001) as an emerging economy (Hamilton & Webster, 2009). As evident in the article, the slowdown in China’s rapid growth rate to more