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111-602: It was developed by Hines and designed by Pickard Chilton. The building was designed before the Great Recession of the early 21st century, and constructed after it. A groundbreaking ceremony was held for the tower in January 2013. The building has Gold LEED certification. The US Green Building Council indicates that the River Point building achieved Platinum LEEDS status as of January 30, 2019. The building became

222-603: A 2019 research paper published by the Brookings Institution adjusting the historical GDP time series using value-added tax data, which the authors said are "highly resistant to fraud and tampering", China's economic growth may have been overstated by 1.7 percent each year between 2008 and 2016, meaning that the government may have been overstating the size of the Chinese economy by 12–16 percent in 2016. Several Western academics and institutions have supported

333-430: A capitalist system separate from mainland China. These strategies are aimed at the relatively underdeveloped regions of China in an attempt to address unequal development: China engages in state-led investment and industrial policy and with a significant state-owned enterprise sector. The Chinese Communist Party (CCP) describes China's economic system as the socialist market economy . To guide economic development,

444-478: A crisis of ideas in mainstream economics and within the economics profession, and call for a reshaping of both the economy, economic theory and the economics profession. They argue that such a reshaping should include new advances within feminist economics and ecological economics that take as their starting point the socially responsible, sensible and accountable subject in creating an economy and economic theories that fully acknowledge care for each other as well as

555-676: A former economist at the International Money Fund (IMF) and a senior fellow at the Peterson Institute for International Economics , the size of the Chinese economy by Purchasing Power Parity in 2010 was about $ 14.8 trillion rather than an official estimate at $ 10.1 trillion by IMF, meaning that China's GDP was underestimated by 47 percent. In 2022, China's total government debt stood at approximately CN¥ 94 trillion ( US$ 14 trillion), equivalent to about 77.1% of GDP . In 2014, many analysts expressed concern over

666-582: A large domestic private sector which contribute approximately 60% of the GDP, 80% of urban employment and 90% of new jobs, the system also consist of a high degree of openness to foreign businesses. According to the annual data of major economic indicators released by the National Bureau of Statistics since 1952, China's GDP grew by an average of 6.17% per year in the 26 years from 1953 to 1978. China implemented economic reform in 1978, and from 1979 to 2023,

777-399: A mild economic slowdown during the 2007–2008 financial crisis and initiated a massive stimulus package , which helped to regain its economic growth. More recently, the imposition of the "3 Red Lines" on developer borrowing has sparked a real estate crisis and has raised questions on the accuracy of China's claims for the severity of this crisis. China's economic growth is slowing down in

888-490: A minimum, there's a little 'froth' [in the U.S. housing market]...it's hard not to see that there are a lot of local bubbles". The Economist , writing at the same time, went further, saying, "[T]he worldwide rise in house prices is the biggest bubble in history". Real estate bubbles are (by definition of the word "bubble") followed by a price decrease (also known as a housing price crash ) that can result in many owners holding negative equity (a mortgage debt higher than

999-428: A percentage of GDP has steadily dropped to just around 20%, reflecting its decreasing importance to the Chinese economy. Nevertheless, it remains the largest trading nation in the world and plays a prominent role in international trade . Manufacturing has been transitioning toward high-tech industries such as electric vehicles , renewable energy , telecommunications and IT equipment, and services has also grown as

1110-547: A percentage of GDP. It is also the world's fastest-growing consumer market and second-largest importer of goods . China is also the world's largest consumer of numerous commodities, and accounts for about half of global consumption of metals. China is a net importer of services products. China has bilateral free trade agreements with many nations and is a member of the Regional Comprehensive Economic Partnership (RCEP). Of

1221-610: A potential rise in NPLs from deleveraging". Per the State Administration of Foreign Exchange 's 2019 balance of payments report, the external debt balance of the entire Chinese government at year end was 2% of GDP. Chinese authorities have dismissed analysts' worries, insisting "the country still has room to increase government debt". Former Fed Chairman Ben Bernanke , earlier in 2016, commented that "the   ... debt pile facing China [is] an 'internal' problem, given

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1332-572: A resolution preventing CFTC from regulating derivatives for another six months — when Born's term of office would expire. Ultimately, it was the collapse of a specific kind of derivative, the mortgage-backed security , that triggered the economic crisis of 2008. Paul Krugman wrote in 2009 that the run on the shadow banking system was the fundamental cause of the crisis. "As the shadow banking system expanded to rival or even surpass conventional banking in importance, politicians and government officials should have realised that they were re-creating

1443-770: A sharp drop in international trade , rising unemployment and slumping commodity prices. Several economists predicted that recovery might not appear until 2011 and that the recession would be the worst since the Great Depression of the 1930s. Economist Paul Krugman once commented on this as seemingly the beginning of "a second Great Depression". Governments and central banks responded with fiscal policy and monetary policy initiatives to stimulate national economies and reduce financial system risks. The recession renewed interest in Keynesian economic ideas on how to combat recessionary conditions. Economists advise that

1554-510: A tool for taking excessive risks. Examples of vulnerabilities in the public sector included: statutory gaps and conflicts between regulators; ineffective use of regulatory authority; and ineffective crisis management capabilities. Bernanke also discussed " Too big to fail " institutions, monetary policy, and trade deficits. There are several "narratives" attempting to place the causes of the recession into context, with overlapping elements. Five such narratives include: Underlying narratives #1–3

1665-413: Is a hypothesis that growing income inequality and wage stagnation encouraged families to increase their household debt to maintain their desired living standard, fueling the bubble. Further, this greater share of income flowing to the top increased the political power of business interests, who used that power to deregulate or limit regulation of the shadow banking system. Narrative #5 challenges

1776-552: Is also in line with the planning goals of the Chinese central government to achieve the Two Centenaries , namely the material goal of China becoming a moderately prosperous society in all respects by 2021 and the modernization goal of China becoming a "strong, democratic, civilized, harmonious and modern socialist country" by 2049, the 100th anniversary of the founding of the People's Republic. China retains state control over

1887-448: Is designed to remove the obstacles to accelerated growth in these wealthier regions. By 2035, China's four cities ( Shanghai , Beijing, Guangzhou and Shenzhen) are projected to be among the global top ten largest cities by nominal GDP according to a report by Oxford Economics. In accordance with the one country, two systems policy, the economies of the former British colony of Hong Kong and Portuguese colony of Macau formally preserve

1998-481: Is far from confident in the country's GDP estimates, calling them "man-made" and unreliable and that data releases, especially the GDP numbers, should be used "for reference only". In its place, he developed the Li Keqiang index is an alternative measurement of Chinese economic performance that uses three variables he preferred. Chinese provinces and cities have long been suspected of cooking their numbers, with

2109-742: Is higher than indicated by official figures. Others, such as the Economist Intelligence Unit , state that while there's evidence China's GDP data is "smoothed", they believe that China's nominal and real GDP data are broadly accurate. Still others, state that reported GDP growth is irreconcilable with data coming out of China. In 2024, the United States Department of Agriculture stopped relying on official Chinese government data over reliability concerns. According to 2007 documents obtained by WikiLeaks, Liaoning Party Secretary and future Premier Li Keqiang said he

2220-413: Is more likely to intervene in areas where the prices of goods and services are socially and politically sensitive. For example, China's government intervenes more actively in the commercial banking sector than in private equity, where significantly fewer households participate. The state's involvement in the allocation of finance, contracts, and resources facilitates Chinese government efforts to minimize

2331-466: Is the timing. Subprime lending increased from around 10% of mortgage origination historically to about 20% only from 2004 to 2006, with housing prices peaking in 2006. Blaming affordable housing regulations established in the 1990s for a sudden spike in subprime origination is problematic at best. A more proximate government action to the sudden rise in subprime lending was the SEC relaxing lending standards for

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2442-515: The American Enterprise Institute , which advocates for private enterprise and limited government, have asserted that private lenders were encouraged to relax lending standards by government affordable housing policies. They cite The Housing and Community Development Act of 1992, which initially required that 30 percent or more of Fannie's and Freddie's loan purchases be related to affordable housing. The legislation gave HUD

2553-492: The Commodity Futures Trading Commission , put forth a policy paper asking for feedback from regulators, lobbyists, and legislators on the question of whether derivatives should be reported, sold through a central facility, or whether capital requirements should be required of their buyers. Greenspan, Rubin, and Levitt pressured her to withdraw the paper and Greenspan persuaded Congress to pass

2664-648: The Federal Reserve Bank of St. Louis , China's official statistics are of a high quality compared to other developing, middle-income and low-income countries. In 2016, China was at the 83rd percentile of middle and low-income countries, up from the 38th percentile in 2004. A study by the Federal Reserve Bank of San Francisco found that China's official GDP statistics are "significantly and positively correlated" with externally verifiable measures of economic activity such as import and export data from China's trade partners, suggesting that China's economic growth

2775-676: The IMF criteria for being a global recession only in the single calendar year 2009. That IMF definition requires a decline in annual real world GDP per‑capita . Despite the fact that quarterly data are being used as recession definition criteria by all G20 members , representing 85% of the world GDP , the International Monetary Fund (IMF) has decided—in the absence of a complete data set—not to declare/measure global recessions according to quarterly GDP data. The seasonally adjusted PPP ‑weighted real GDP for

2886-653: The Xi Jinping Administration to enforce economic competition rules , and probes into Alibaba and Tencent have been launched by Chinese economic regulators. The crackdown on tech giants and internet companies during the 2020–2021 Xi Jinping Administration reform spree were followed with calls by the Politburo against monopolistic practices by commercial retail giants like Alibaba . In March 2021, Xi stated China would strengthen its antitrust enforcement in an effort to advance what he described as

2997-409: The commanding heights of the economy in key industries like infrastructure, telecommunications, and finance despite significant marketization of the economy since reform and opening up . Specific mechanisms implementing government control of the commanding heights of the economy include public property rights, pervasive administrative involvement, and CCP supervision of senior managers. The state

3108-496: The country's GDP growth rate grew by an average of 8.93% per year in the 45 years since its implementing economic reform. According to preliminary data released by the authorities, China's GDP in 2023 was CN¥126.06 trillion (US$ 17.89 trillion) with a real GDP increase of at least 5.2% from 2022. China also contributes more than half of all global patenting activity. It leads in several measures of global patent filings , as well as research and scientific output. In 2022, China

3219-559: The percentage of the population living in extreme poverty decreased from 88.1% to 0.2%. Its current account surplus increased by a factor of 53 between 1982 and 2021, from $ 5.67   billion to $ 317   billion. During this time, China also became an industrial powerhouse, moving beyond initial successes in low-wage sectors like clothing and footwear to the increasingly sophisticated production of computers , pharmaceuticals , and automobiles . China's factories generated $ 3.7   trillion real manufacturing value added, more than

3330-429: The 19th and early 20th centuries, the current banking panic is a wholesale panic, not a retail panic. In the earlier episodes, depositors ran to their banks and demanded cash in exchange for their checking accounts. Unable to meet those demands, the banking system became insolvent. The current panic involved financial firms "running" on other financial firms by not renewing sale and repurchase agreements (repo) or increasing

3441-416: The 19th century. Yet, over the past 30-plus years, we permitted the growth of a shadow banking system – opaque and laden with short term debt – that rivaled the size of the traditional banking system. Key components of the market – for example, the multitrillion-dollar repo lending market, off-balance-sheet entities, and the use of over-the-counter derivatives – were hidden from view, without

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3552-483: The 2020s as it deals with a range of challenges from a rapidly aging population , higher unemployment and a property crisis . China has the world's sixth largest gold reserve , with over 2,000 tonnes of gold. With 791 million workers, the Chinese labor force was the world's largest as of 2021, according to The World Factbook . As of 2022 , China was second in the world in total number of billionaires . and second in millionaires with 6.2 million. China has

3663-501: The Chinese central government adopts five-year plans that detail its economic priorities and essential policies. The fourteenth five-year plan (2021–2025) is currently being implemented, placing an emphasis on consumption-driven growth and technological self-sufficiency while China transitions from being an upper middle-income economy to a high-income economy. The public sector plays a central role in China's economy. This development

3774-544: The FCIC Republican minority dissenting report also concluded that U.S. housing policies were not a robust explanation for a wider global housing bubble. The hypothesis that a primary cause of the crisis was U.S. government housing policy requiring banks to make risky loans has been widely disputed, with Paul Krugman referring to it as "imaginary history". One of the other challenges with blaming government regulations for essentially forcing banks to make risky loans

3885-533: The Federal Reserve has been widely discussed, the main point of controversy remains the lowering of the Federal funds rate to 1% for more than a year, which, according to Austrian theorists , injected huge amounts of "easy" credit-based money into the financial system and created an unsustainable economic boom. There is an argument that Greenspan's actions in the years 2002–2004 were actually motivated by

3996-416: The Federal Reserve. Further, American International Group (AIG) had insured mortgage-backed and other securities but was not required to maintain sufficient reserves to pay its obligations when debtors defaulted on these securities. AIG was contractually required to post additional collateral with many creditors and counter-parties, touching off controversy when over $ 100 billion of U.S. taxpayer money

4107-690: The G20‑;zone, however, is a good indicator for the world GDP, and it was measured to have suffered a direct quarter on quarter decline during the three quarters from Q3‑2008 until Q1‑2009, which more accurately mark when the recession took place at the global level. According to the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the recession began in December 2007 and ended in June 2009, and thus extended over eighteen months. The years leading up to

4218-586: The People's Republic of China is a developing mixed socialist market economy , incorporating industrial policies and strategic five-year plans . China is the world's second largest economy by nominal GDP and since 2017 has been the world's largest economy when measured by purchasing power parity (PPP). China accounted for 19% of the global economy in 2022 in PPP terms, and around 18% in nominal terms in 2022. The economy consists of state-owned enterprises (SOEs) and mixed-ownership enterprises, as well as

4329-753: The Summit on Financial Markets and the World Economy," dated November 15, 2008, leaders of the Group of 20 cited the following causes: During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in

4440-644: The Treasury. The Treasury had earned another $ 323B in interest on bailout loans, resulting in an $ 87B profit. Economic and political commentators have argued the Great Recession was also an important factor in the rise of populist sentiment that resulted in the election of right-wing populist President Trump in 2016, and left-wing populist Bernie Sanders ' candidacy for the Democratic nomination. Economy of China The economy of

4551-628: The US, South Korea, Germany and the UK combined. China's manufacturing sector benefits from one of the world's largest domestic markets, immense manufacturing scale, and highly developed manufacturing supply chains. It also has two ( Shenzhen-Hong Kong-Guangzhou and Beijing in the 2nd and 3rd spots respectively) of the global top   5 science and technology clusters, which is more than any other country. China has sustained growth due to export relations, its manufacturing sector , and low-wage workers. China's

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4662-449: The US, from $ 106,591 to $ 68,839 between 2005 and 2011. The US Financial Crisis Inquiry Commission , composed of six Democratic and four Republican appointees, reported its majority findings in January 2011. It concluded that "the crisis was avoidable and was caused by: There were two Republican dissenting FCIC reports. One of them, signed by three Republican appointees, concluded that there were multiple causes. In his separate dissent to

4773-546: The United States, and 21% in Denmark. Household defaults, underwater mortgages (where the loan balance exceeds the house value), foreclosures, and fire sales are now endemic to a number of economies. Household deleveraging by paying off debts or defaulting on them has begun in some countries. It has been most pronounced in the United States, where about two-thirds of the debt reduction reflects defaults." The onset of

4884-465: The United States. China's unequal transportation system , combined with important differences in the availability of natural and human resources and in industrial infrastructure , has produced significant variations in the regional economies of China. The economic development of Shenzhen has caused the city to be referred to as the world's next Silicon Valley . Economic development has generally been more rapid in coastal provinces than in

4995-513: The academic definition, the recession ended in the United States in June or July 2009. Journalist Robert Kuttner has argued that 'The Great Recession' is a misnomer. According to Kuttner, "recessions are mild dips in the business cycle that are either self-correcting or soon cured by modest fiscal or monetary stimulus. Because of the continuing deflationary trap, it would be more accurate to call this decade's stagnant economy The Lesser Depression or The Great Deflation." The Great Recession met

5106-436: The authors claim to be a best-unbiased predictor of the economic growth in Chinese cities. The results suggest that the Chinese economic growth rate is higher than the official reported data. Satellite measurements of light pollution are used by some analysts to model Chinese economic growth and suggest growth rate numbers in Chinese official data are more reliable, though are likely to be smoothed. According to an article by

5217-464: The bailout measures started under the Bush administration and continued during his administration as completed and mostly profitable as of December 2014 . As of January 2018 , bailout funds had been fully recovered by the government, when interest on loans is taken into consideration. A total of $ 626B was invested, loaned, or granted due to various bailout measures, while $ 390B had been returned to

5328-469: The bailouts. In 2008, TARP allocated $ 426.4 billion to various major financial institutions. However, the US collected $ 441.7 billion in return from these loans in 2010, recording a profit of $ 15.3 billion. Nonetheless, there was a political shift from the Democratic party. Examples include the rise of the Tea Party and the loss of Democratic majorities in subsequent elections. President Obama declared

5439-500: The city of Chicago, the building also includes a 1.5-acre (0.61 ha) public park and a landscaped riverwalk that is open to the public. To accommodate the land required for the public park and river walk it is built over a set of active railroad tracks. The building's design reflects its location well, where the two branches of the Chicago River begin, with critic Blair Kamin noting "its exuberant curves" and how it reflects

5550-582: The claim that China's economy is likely to be underestimated. A paper by the US-based National Bureau of Economic Research claimed that China's economic growth may be higher than what is reported by official statistics. An article by Hunter Clarka, Maxim Pinkovskiya and Xavier Sala-i-Martin published by the Elsevier Science Direct in 2018 employs an innovative method of satellite-recorded nighttime lights, which

5661-628: The country's dollar reserves . By the time the KMT was defeated, commerce had been destroyed, the national currency rendered valueless, and the economy was based on barter. The People's Republic of China's development from one of the poorest countries to one of the largest economies was the quickest of any country. From 1949 until the Chinese economic reform in 1978, the economy was state-led with market activity remaining underground. Economic reforms began under Deng Xiaoping . China subsequently became

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5772-453: The crisis were characterized by an exorbitant rise in asset prices and associated boom in economic demand. Further, the U.S. shadow banking system (i.e., non-depository financial institutions such as investment banks) had grown to rival the depository system yet was not subject to the same regulatory oversight, making it vulnerable to a bank run . US mortgage-backed securities , which had risks that were hard to assess, were marketed around

5883-668: The crisis) and vulnerabilities (i.e., structural weaknesses in the financial system, regulation and supervision) that amplified the shocks. Examples of triggers included: losses on subprime mortgage securities that began in 2007 and a run on the shadow banking system that began in mid-2007, which adversely affected the functioning of money markets. Examples of vulnerabilities in the private sector included: financial institution dependence on unstable sources of short-term funding such as repurchase agreements or Repos; deficiencies in corporate risk management; excessive use of leverage (borrowing to invest); and inappropriate usage of derivatives as

5994-442: The current value of the property). Several sources have noted the failure of the US government to supervise or even require transparency of the financial instruments known as derivatives . Derivatives such as credit default swaps (CDSs) were unregulated or barely regulated. Michael Lewis noted CDSs enabled speculators to stack bets on the same mortgage securities. This is analogous to allowing many persons to buy insurance on

6105-523: The downturn. In advanced economies, during the five years preceding 2007, the ratio of household debt to income rose by an average of 39 percentage points, to 138 percent. In Denmark, Iceland, Ireland, the Netherlands, and Norway, debt peaked at more than 200 percent of household income. A surge in household debt to historic highs also occurred in emerging economies such as Estonia, Hungary, Latvia, and Lithuania. The concurrent boom in both house prices and

6216-619: The economic crisis took most people by surprise. A 2009 paper identifies twelve economists and commentators who, between 2000 and 2006, predicted a recession based on the collapse of the then-booming housing market in the United States: Dean Baker , Wynne Godley , Fred Harrison , Michael Hudson , Eric Janszen , Med Jones Steve Keen , Jakob Brøchner Madsen , Jens Kjaer Sørensen, Kurt Richebächer , Nouriel Roubini , Peter Schiff , and Robert Shiller . By 2007, real estate bubbles were still under way in many parts of

6327-405: The economic headwinds that slowed the recovery: On the political front, widespread anger at banking bailouts and stimulus measures (begun by President George W. Bush and continued or expanded by President Obama ) with few consequences for banking leadership, were a factor in driving the country politically rightward starting in 2010. The Troubled Asset Relief Program (TARP) was the largest of

6438-411: The economy. China operates the world's longest and most extensive high speed rail network, which spans 45,000 kilometers. China is the world's largest manufacturing industrial economy and exporter of goods . China is widely regarded as the "powerhouse of manufacturing" or "the factory of the world". Its production exceeds that of the nine next largest manufacturers combined. However, exports as

6549-479: The effects of market volatility. Local governments' level of authority and autonomy in economic decision-making is high, and they have played a major role in national economic development. Local governments may also offer incentives or subsidies to attract business. One common tax incentive is "three tax-free and three half-tax", through which businesses can be allowed not to pay corporate income tax for their first three years of operation, and paying half rate for

6660-471: The fall of Lehman Brothers on September 15, 2008, a major panic broke out on the inter-bank loan market. There was the equivalent of a bank run on the shadow banking system , resulting in many large and well established investment banks and commercial banks in the United States and Europe suffering huge losses and even facing bankruptcy, resulting in massive public financial assistance (government bailouts). The global recession that followed resulted in

6771-532: The focus on local government officials, whose performance are often assessed based on how well their respective economies have performed. Local governments have come under increased scrutiny over the last few years over economic data, with CCP general secretary Xi Jinping stating that economic data forgery "not only hurt our judgment of the economic situation, but also seriously undermined the Communist Party's ideas and truth-seeking style". According to

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6882-454: The following recovery weaker. Robert Reich claims the amount of debt in the US economy can be traced to economic inequality , assuming that middle-class wages remained stagnant while wealth concentrated at the top, and households "pull equity from their homes and overload on debt to maintain living standards". The IMF reported in April 2012: "Household debt soared in the years leading up to

6993-580: The growth of new businesses has outpaced the government's ability to regulate them. This has created a situation where businesses, faced with mounting competition and poor oversight, take drastic measures to increase profit margins , often at the expense of consumer safety . This issue became more prominent in 2007, with a number of restrictions being placed on problematic Chinese exports by the United States. The Chinese technology sector has been characterized as being dominated by few, larger entities including Ant Group and Tencent. There have been attempts by

7104-455: The headquarters of Morton Salt in December 2016. The anchor tenant is the law firm McDermott Will & Emery , which occupies 225,000 sq ft (20,900 m) of office space, and it moved in to River Point in March 2017. Mead Johnson also relocated its headquarters from suburban Glenview to the building. The land on which this tower stands is known as River Point because it lies at

7215-481: The healthy and sustainable development of the platform economy. Two major institutional changes resulted. In November 2021, China upgraded the bureaucratic status of the State Administration for Market Regulation 's antitrust bureau. In June 2022, it made major amendments to the Anti-Monopoly Law , including explicit language focused on regulation of the platform economy. The following table shows

7326-473: The inflow of investment dollars required to fund the U.S. trade deficit was a major cause of the housing bubble and financial crisis: "The trade deficit, less than 1% of GDP in the early 1990s, hit 6% in 2006. That deficit was financed by inflows of foreign savings, in particular from East Asia and the Middle East. Much of that money went into dodgy mortgages to buy overvalued houses, and the financial crisis

7437-765: The interior and there are large disparities in per capita income between regions. The three wealthiest regions are the Yangtze Delta in East China; the Pearl River Delta in South China; and  Jing-Jin-Ji region in North China. It is the rapid development of these areas that is expected to have the most significant effect on the Asian regional economy as a whole and Chinese government policy

7548-541: The kind of financial vulnerability that made the Great Depression possible – and they should have responded by extending regulations and the financial safety net to cover these new institutions. Influential figures should have proclaimed a simple rule: anything that does what a bank does, anything that has to be rescued in crises the way banks are, should be regulated like a bank." He referred to this lack of controls as "malign neglect". During 2008, three of

7659-568: The largest U.S. investment banks either went bankrupt ( Lehman Brothers ) or were sold at fire sale prices to other banks ( Bear Stearns and Merrill Lynch ). The investment banks were not subject to the more stringent regulations applied to depository banks. These failures exacerbated the instability in the global financial system. The remaining two investment banks, Morgan Stanley and Goldman Sachs , potentially facing failure, opted to become commercial banks, thereby subjecting themselves to more stringent regulation but receiving access to credit via

7770-476: The largest middle-class in the world, with over 500 million people earning over RMB 120,000 a year. Public social expenditure in China was around 10% of GDP. Additionally, the public pension expenditure in China accounted for 5.2% of GDP. Historically, China was one of the world's foremost economic powers for most of the two-millennia Pax Sinica from the 1st until the 19th century . China accounted for around one-quarter to one-third of global GDP until

7881-590: The main headline is that all sorts of poor countries became kind of rich, making things like TVs and selling us oil. China, India, Abu Dhabi, Saudi Arabia made a lot of money and banked it." Describing the crisis in Europe, Paul Krugman wrote in February 2012 that: "What we're basically looking at, then, is a balance of payments problem, in which capital flooded south after the creation of the euro, leading to overvaluation in southern Europe." Another narrative about

7992-466: The majority and minority opinions of the FCIC, Commissioner Peter J. Wallison of the American Enterprise Institute (AEI) primarily blamed U.S. housing policy, including the actions of Fannie and Freddie , for the crisis. He wrote: "When the bubble began to deflate in mid-2007, the low quality and high risk loans engendered by government policies failed in unprecedented numbers." In its "Declaration of

8103-621: The majority of the borrowings was issued in local currency. A 2019 survey by the OECD found that China's corporate debt is higher than other major countries. Shadow banking has risen in China, posing risks to the financial system. Off the books debt is a grey area, but estimates place the amount for local governments alone as high as $ 9 trillion or 63 trillion yuan, up from estimates of around 30 trillion yuan in 2020. Though China's economy has expanded rapidly, its regulatory environment has not kept pace. Since Deng Xiaoping's open market reforms,

8214-741: The mid-1800s. China's share of global GDP was one-third in 1820 as the Industrial Revolution was beginning in Great Britain. China's GDP in 1820 was six times as large as Britain's, the largest economy in Europe ;– and almost twenty times the GDP of the nascent United States. At the end of the Chinese Civil War , the economy was devastated. As the defeated Nationalists fled to Taiwan, they stripped China of liquid assets including gold, silver, and

8325-662: The need to take the U.S. economy out of the early 2000s recession caused by the bursting of the dot-com bubble : although by doing so he did not avert the crisis, but only postponed it. Another narrative focuses on high levels of private debt in the US economy. USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990. Faced with increasing mortgage payments as their adjustable rate mortgage payments increased, households began to default in record numbers, rendering mortgage-backed securities worthless. High private debt levels also impact growth by making recessions deeper and

8436-412: The next three years. China's SOEs perform important functions that benefit the state. Academic Wendy Leutert writes, "They contribute to central and local governments revenues through dividends and taxes, support urban employment, keep key input prices low, channel capital towards targeted industries and technologies, support sub-national redistribution to poorer interior and western provinces, and aid

8547-544: The obligation and defaulted; U.S. taxpayers paid over $ 100 billion to global financial institutions to honor AIG obligations, generating considerable outrage. A 2008 investigative article in The Washington Post found leading government officials at the time (Federal Reserve Board Chairman Alan Greenspan , Treasury Secretary Robert Rubin , and SEC Chairman Arthur Levitt ) vehemently opposed any regulation of derivatives. In 1998, Brooksley E. Born , head of

8658-487: The origin has been focused on the respective parts played by public monetary policy (notably in the US) and by the practices of private financial institutions. In the U.S., mortgage funding was unusually decentralised, opaque, and competitive, and it is believed that competition between lenders for revenue and market share contributed to declining underwriting standards and risky lending. While Alan Greenspan's role as Chairman of

8769-502: The overall size of China's government debt. At the end of 2014, the International Monetary Fund reported that China's general government gross debt-to-GDP ratio was 41.44 percent. In 2015, a report by the International Monetary Fund concluded that China's public debt is relatively low "and on a stable path in all standard stress tests except for the scenario with contingent liability shocks", such as "a large-scale bank recapitalization or financial system bailout to deal, for example, with

8880-530: The planet. Though no one knew they were in it at the time, the Great Recession had a significant economic and political impact on the United States. While the recession technically lasted from December 2007 – June 2009 (the nominal GDP trough), many important economic variables did not regain pre-recession (November or Q4 2007) levels until 2011–2016. For example, real GDP fell $ 650 billion (4.3%) and did not recover its $ 15 trillion pre-recession level until Q3 2011. Household net worth, which reflects

8991-585: The point where the North and South branches of the Chicago River form. It is between Canal Street and the Chicago River, and was the tallest building in Chicago west of the Chicago river until it was overtaken by 150 North Riverside , completed a few months later in 2017, which is also built on air rights over the railroad tracks leading into Union Station to the south of both properties. As required by

9102-522: The popular claim (narrative #4) that subprime borrowers with shoddy credit caused the crisis by buying homes they couldn't afford. This narrative is supported by new research showing that the biggest growth of mortgage debt during the U.S. housing boom came from those with good credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults. The Economist wrote in July 2012 that

9213-526: The power to set future requirements. These rose to 42 percent in 1995 and 50 percent in 2000, and by 2008 a 56 percent minimum was established. However, the Financial Crisis Inquiry Commission (FCIC) Democratic majority report concluded that Fannie & Freddie "were not a primary cause" of the crisis and that CRA was not a factor in the crisis. Further, since housing bubbles appeared in multiple countries in Europe as well,

9324-410: The protections we had constructed to prevent financial meltdowns. We had a 21st-century financial system with 19th-century safeguards. The Gramm–Leach–Bliley Act (1999), which reduced the regulation of banks by allowing commercial and investment banks to merge, has also been blamed for the crisis, by Nobel Prize –winning economist Joseph Stiglitz among others. Peter Wallison and Edward Pinto of

9435-402: The recession have been described as a symptom of another, deeper crisis by a number of economists. For example, Ravi Batra argues that growing inequality of financial capitalism produces speculative bubbles that burst and result in depression and major political changes . Feminist economists Ailsa McKay and Margunn Bjørnholt argue that the financial crisis and the response to it revealed

9546-488: The recovery was that both individuals and businesses paid down debts for several years, as opposed to borrowing and spending or investing as had historically been the case. This shift to a private sector surplus drove a sizable government deficit. However, the federal government held spending at about $ 3.5 trillion from fiscal years 2009–2014 (thereby decreasing it as a percent of GDP), a form of austerity . Then-Fed Chair Ben Bernanke explained during November 2012 several of

9657-695: The remaining 60%. As of the end of 2019, the total assets of all China's SOEs, including those operating in the financial sector, reached US$ 58.97   trillion In 2015. Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies. As of 2023 , private firms only represent 37% of the country's top-100 listed firms, according to the Peterson Institute for International Economics . There exists disputes over reliability of official economic data. Foreign and some Chinese sources have claimed that official Chinese government statistics overstate China's economic growth. However, several Western academics and institutions have stated that China's economic growth

9768-461: The repo margin ("haircut"), forcing massive deleveraging, and resulting in the banking system being insolvent. The Financial Crisis Inquiry Commission reported in January 2011: In the early part of the 20th century, we erected a series of protections – the Federal Reserve as a lender of last resort , federal deposit insurance, ample regulations – to provide a bulwark against the panics that had regularly plagued America's banking system in

9879-515: The river, like the "great 1983 high-rise" building across the river from it, 333 Wacker Drive . It was the first new downtown skyscraper to open in seven years, due to the Great Recession. Kamin points out how the structure of this building is affected by the once-surface railroad tracks and the CTA Blue Line subway tunnel running beneath it, requiring a tilt in some support columns. That tilt results in "the building's most distinctive feature:

9990-499: The same house. Speculators that bought CDS protection were betting significant mortgage security defaults would occur, while the sellers (such as AIG ) bet they would not. An unlimited amount could be wagered on the same housing-related securities, provided buyers and sellers of the CDS could be found. When massive defaults occurred on underlying mortgage securities, companies like AIG that were selling CDS were unable to perform their side of

10101-642: The state's response to natural disasters, financial crises and social instability." Almost 867,000 enterprises in China have a degree of state ownership, according to Franklin Allen of Imperial College London . As of 2017, China has more SOEs than any other country, and the most SOEs among large national companies. State-owned enterprises accounted for over 60% of China's market capitalization in 2019 and generated 40% of China's GDP of US$ 15.98   trillion dollars (101.36 trillion yuan) in 2020, with domestic and foreign private businesses and investment accounting for

10212-518: The stimulus measures such as quantitative easing (pumping money into the system) and holding down central bank wholesale lending interest rate should be withdrawn as soon as economies recover enough to "chart a path to sustainable growth ". The distribution of household incomes in the United States became more unequal during the post-2008 economic recovery . Income inequality in the United States grew from 2005 to 2012 in more than two thirds of metropolitan areas. Median household wealth fell 35% in

10323-663: The stock market meant that household debt relative to assets held broadly stable, which masked households' growing exposure to a sharp fall in asset prices. When house prices declined, ushering in the global financial crisis, many households saw their wealth shrink relative to their debt, and, with less income and more unemployment, found it harder to meet mortgage payments. By the end of 2011, real house prices had fallen from their peak by about 41% in Ireland, 29% in Iceland, 23% in Spain and

10434-547: The system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions. Federal Reserve Chair Ben Bernanke testified in September 2010 before the FCIC regarding the causes of the crisis. He wrote that there were shocks or triggers (i.e., particular events that touched off

10545-522: The tall parabolic arch at its base". Kamin concludes that the site demanded, and this building delivered "a memorable statement". Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009. The scale and timing of the recession varied from country to country (see map). At the time, the International Monetary Fund (IMF) concluded that it

10656-498: The top investment banks during an April 2004 meeting with bank leaders. These banks increased their risk-taking shortly thereafter, significantly increasing their purchases and securitization of lower-quality mortgages, thus encouraging additional subprime and Alt-A lending by mortgage companies. This action by its investment bank competitors also resulted in Fannie Mae and Freddie Mac taking on more risk. The financial crisis and

10767-520: The value of both stock markets and housing prices, fell $ 11.5 trillion (17.3%) and did not regain its pre-recession level of $ 66.4 trillion until Q3 2012. The number of persons with jobs (total non-farm payrolls) fell 8.6 million (6.2%) and did not regain the pre-recession level of 138.3 million until May 2014. The unemployment rate peaked at 10.0% in October 2009 and did not return to its pre-recession level of 4.7% until May 2016. A key dynamic slowing

10878-453: The word "recession" exist: one sense referring definitively to "a period of reduced economic activity" and ongoing hardship; and the more allegoric interpretation used in economics , which is defined operationally , referring specifically to the contraction phase of a business cycle , with two or more consecutive quarters of GDP contraction (negative GDP growth rate) and typically used to influence abrupt changes in monetary policy. Under

10989-462: The world as of 2020, receiving inflows of $ 163   billion. but more recently, inbound FDI has fallen sharply to negative levels. It has the second largest outbound FDI , at US$ 136.91 billion for 2019. China has the world's largest foreign-exchange reserves worth $ 3.1   trillion, but if the foreign assets of China's state-owned commercial banks are included, the value of China's reserves rises to nearly $ 4   trillion. China faced

11100-430: The world's 500 largest companies , 142 are headquartered in China. It has three of the world's top ten most competitive financial centers and three of the world's ten largest stock exchanges (both by market capitalization and by trade volume ). China has the second-largest financial assets in the world , valued at $ 17.9 trillion as of 2021. China was the largest recipient of foreign direct investment (FDI) in

11211-425: The world's fastest-growing major economy , with growth rates averaging 10% over 30 years. Many scholars consider the Chinese economic model as an example of authoritarian capitalism , state capitalism or party-state capitalism . China brought more people out of extreme poverty than any other country in history —between 1978 and 2018, China reduced extreme poverty by 800 million. Between 1981 and 2019,

11322-687: The world, especially in the United States , France, the United Kingdom , Spain , the Netherlands, Australia, the United Arab Emirates, New Zealand , Ireland , Poland , South Africa , Greece , Bulgaria , Croatia , Norway , Singapore , South Korea , Sweden , Finland , Argentina , the Baltic states , India , Romania , Ukraine and China . U.S. Federal Reserve Chairman Alan Greenspan said in mid-2005 that "at

11433-454: The world, as they offered higher yields than U.S. government bonds. Many of these securities were backed by subprime mortgages, which collapsed in value when the U.S. housing bubble burst during 2006 and homeowners began to default on their mortgage payments in large numbers starting in 2007. The emergence of subprime loan losses in 2007 began the crisis and exposed other risky loans and over-inflated asset prices. With loan losses mounting and

11544-725: Was able to accurately predict the advance of this recession, except for minor signals in the sudden rise of forecast probabilities, which were still well under 50%. The recession was not felt equally around the world; whereas most of the world's developed economies , particularly in North America, South America and Europe, fell into a severe, sustained recession, many more recently developing economies suffered far less impact, particularly China , India and Indonesia , whose economies grew substantially during this period. Similarly, Oceania suffered minimal impact , in part due to its proximity to Asian markets. Two interpretations of

11655-421: Was called the subprime mortgage crisis . The combination of banks being unable to provide funds to businesses, and homeowners paying down debt rather than borrowing and spending, resulted in the Great Recession that began in the U.S. officially in December 2007 and lasted until June 2009, thus extending over 19 months. As with most other recessions, it appears that no known formal theoretical or empirical model

11766-481: Was no slower than the official figures indicated. The study by Daniel H. Rosen and Beibei Bao, published by the Center for Strategic and International Studies in 2015, showed that GDP in 2008 was actually 13–16 percent bigger than the official data, while 2013 GDP was accurately at $ 10.5   trillion rather than the official figure at $ 9.5   trillion. According to a research conducted by Arvind Subramanian ,

11877-456: Was paid out to major global financial institutions on behalf of AIG. While this money was legally owed to the banks by AIG (under agreements made via credit default swaps purchased from AIG by the institutions), a number of Congressmen and media members expressed outrage that taxpayer money was used to bail out banks. Economist Gary Gorton wrote in May 2009 Unlike the historical banking panics of

11988-483: Was ranked the 11th most innovative country in the world, 3rd in Asia & Oceania region and 2nd for countries with a population of over 100 million. It is the only middle-income economy and the only newly industrialized economy in the top 30. China is also the world's largest high technology exporter. As of 2021 , the country spends around 2.43% of GDP on advance research and development across various sectors of

12099-571: Was the most severe economic and financial meltdown since the Great Depression . The causes of the Great Recession include a combination of vulnerabilities that developed in the financial system, along with a series of triggering events that began with the bursting of the United States housing bubble in 2005–2012. When housing prices fell and homeowners began to abandon their mortgages, the value of mortgage-backed securities held by investment banks declined in 2007–2008, causing several to collapse or be bailed out in September 2008. This 2007–2008 phase

12210-607: Was the only major world economy to experience GDP growth in 2020, when its GDP increased by 2.3%. However, it posted one of its worst economic performances in decades because of the COVID-19 pandemic in 2022. In 2023, IMF predicted China to continue being one of the fastest growing major economies. China's economy is both a contributor to rising global greenhouse gas (GHG) emissions causing climate change and severely affected by its adverse impacts , although its per capita emissions are still much lower than developed economies such as

12321-402: Was the result." In May 2008, NPR explained in their Peabody Award winning program " The Giant Pool of Money " that a vast inflow of savings from developing nations flowed into the mortgage market, driving the U.S. housing bubble. This pool of fixed income savings increased from around $ 35 trillion in 2000 to about $ 70 trillion by 2008. NPR explained this money came from various sources, "[b]ut

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