Questioning the Rise of the South II: From Emerging Markets Boom to Emerging Markets Crisis

Abstract

The chapter examines the extent to which the 2008 financial crisis and its aftermath has altered the balance of power in the international order. It specifically challenges the view that 2008 signals a moment of both irreversible decline for the USA and the rise of the South. It first shows how the boom before 2008 rested on a number of specifics (China–US interdependence, primary commodity booms in the rest of the South, capital flows to the South) and how, after the crisis, recovery in the South also rested on a number of factors (capital flows to the South, renewed high commodity prices, China’s stimulus). Drawing on the most up to date empirical material, the chapter then shows how this recovery in the South has come to an end, with falling primary commodity prices, capital inflows now becoming outflows, serious economic difficulties in China and slowdowns in growth in much of the South.