The Chinese Birdcage: How China's Rise Almost Toppled the West [Paperback]

This book vividly describes how Chinas rise in the early 2000s led to rising profits and declining labor income everywhere, ultimately resulting in the global financial crisis. Under Deng Xiaopings policy of reform and opening up in the 1980s, China quickly became the worlds factory floor...but powerful political leaders envisioned a world in which the market economy would be trapped within the confines of a planned economy. With Chinas admission into the World Trade Organization in 2001, almost a billion people joined the global workforce, driving down the real wages of blue- and white-collar workers in the US and Europe while also lowering interest rates, which fueled housing bubbles and destabilized the financial sector. This book explores Chinas significant influence on western economies by focusing on the links between the labor market, corporate profits, and interest rates, using Arthur Lewis's framework for economic growth with unlimited supplies of labor to argue that by 2010 the world economy  and political situations  had been set back almost one hundred years. Since the 1980s China has been on a path of economic reform delivering better results in terms of economic growth than the policies of the IMF. With China's accession to the WTO almost a billion workers were added to the global economy. Within no time, China became the world's factory thanks to the virtually unlimited supply of cheap labor, driving down the real wage of blue- and white-collar workers in the U.S. and Europe. Although the U.S. government supported the economy by the low-interest policy, it resulted in the housing bubble and the destabilization of the financial sector. The economic growth in China has a significant influence on the economy in the U.S. and Europe. This book tries to figure out the influence by focusing on the link between the labour market and the monetary policy in the U.S. This proposal offers an original contribution to the field because the author lCĪ