Since the onset of the global financial crisis in 2008, one country more than any other has provided the “heavy lifting” to support global economic growth. That country is China, the world’s second-biggest economy. The most compelling piece of evidence comes from China’s balance of payments position. In 2007, China posted a current account surplus the equivalent of 10.1 per cent of gross domestic product. Last year, the surplus was down to a mere 2.1 per cent of GDP.

This adjustment — enormous in the history of such things — occurred for two key reasons.

? First, in the light of faltering export growth, Beijing shifted towards a “domestic demand first” policy, thanks to massive stimulus of infrastructure investment. Total investment spending rose from 41 per cent of GDP in 2007 to 47 per cent in 2013. Domestic investment thus rose relative to domestic savings, thereby reducing net capital account outflows.