As the financial crisis that began in the United States intensified and spread, China's economy still performed well and its influence in the world economy continued to grow.

This is mainly reflected in China's increasing contribution to world economic growth, its ability to compete with the United States, Japan and Germany in the world rankings of trade scale and GDP, and its ranking first in the world in terms of foreign exchange reserves and holdings of US Treasury bonds.

About half of world economic growth in 2009 will be contributed by China. Affected by the financial crisis that originated in the United States, world economic growth in 2009 will inevitably slow down after 2008.

According to the World Economic Outlook (revised forecast) released by the International Monetary Fund (IMF) in November, Japan, the United States and the European Union will all fall into negative growth in 2009, and the world economic growth rate will also drop from 3.7% in 2008 to 2.2%.

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Although China's economic growth will continue to slow down, it is estimated that it will be able to maintain a relatively high growth rate of 8.5% in 2009.

In addition, based on purchasing power parity (PPP) calculations, China's GDP is equivalent to 12.0% of the world's. Therefore, China's contribution to world economic growth will reach 1.02% (8.5% × 12.0%), which is approximately equivalent to the global economic growth rate.

(2.2%), much higher than major emerging countries such as India and Russia (Chart 1).

Table 1 The contribution of major countries and regions to world economic growth (source) is drawn based on IMF, World Economic Outlook Update, November 6, 2008.

The world's largest export country and the world's third largest GDP country, China's exports reached US$1.22 trillion in 2007, ranking second in the world after Germany (US$1.33 trillion). However, after entering 2008, China continued to maintain an annual growth rate of 20%.

Growth has surpassed that of Germany since July (Figure 2).

At the same time, according to the International Monetary Fund (IMF) report, China's GDP in 2007 was US$3.25 trillion, ranking behind the United States (US$13.84 trillion), Japan (US$4.38 trillion) and Germany (US$3.32 trillion).

, ranking fourth in the world, and the gap with Germany is very small.

In 2008, China's growth rate is expected to exceed 9%, which is much higher than Germany's 1.7% growth rate. In addition, China's inflation rate is higher than Germany's and the RMB appreciates against the euro. Therefore, China's GDP will steadily surpass Germany's and rank first in the world.

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Figure 2: China’s export scale surpassed Germany to become the world’s largest (source) Drawn based on data released by the German Federal Statistical Office and the Chinese Ministry of Commerce.

The world's largest foreign exchange reserves and holdings of U.S. Treasury bonds. China's foreign exchange reserves surpassed Japan's in February 2006 and ranked first in the world. It has continued to increase since then and reached US$1.9 trillion in September 2008.

If you include the $200 billion that has been transferred to China Investment Corporation, the scale is even larger.

A significant portion of this is invested in U.S. dollar assets centered on U.S. Treasuries.

In fact, according to official U.S. statistics, in September 2008, the balance of U.S. Treasury bonds held by China reached US$585 billion, exceeding Japan's holdings for the first time (Figure 3).

Figure 3 China’s foreign exchange reserves and U.S. Treasury bond holdings exceed those of Japan. (Note) The year-end figures are for September 2008.

(Source) Based on data released by the U.S. Department of the Treasury and the State Administration of Foreign Exchange of China.

In order to stabilize the financial system and implement economic countermeasures, the United States will need huge fiscal expenditures in the future, and in order to raise these funds, it must issue a large amount of national debt.

Whether China continues to invest mainly in U.S. Treasury bonds as usual has become the main factor affecting U.S. interest rates and the U.S. dollar exchange rate, and it has become increasingly important.

From a regional power to a global economic power, after the financial crisis originating from the United States, the world economic landscape will undergo tremendous changes.

Here, we might as well review it.

Starting with the depreciation of the Thai baht in July 1997, the currencies of neighboring countries, including Japan, depreciated sharply and fell into a serious financial crisis. However, China maintained a growth rate of 7% by expanding fiscal spending. The Asian Financial Crisis of 1997-1998

It became a symbolic event for China’s rise as a regional economic power.

In the international financial crisis 10 years later, the economies of the United States, the epicenter of the crisis, and developed regions such as the European Union and Japan suffered a heavy blow.

Under such circumstances, if China succeeds in maintaining rapid growth, its status as a global power will surely become unshakable.