Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

shutter their Chinese operations.10 At the same time, cash-hungry Western banks such as Bank of America, UBS and RBS sold up and pulled out. But these were pinpricks when compared with the impact of falling export orders on China’s labor market. As the winter of 2008–2009 approached, 30 percent of China’s gigantic annual surge of college graduates—5.6 million per annum—were unable to find work. The reserve army of tens of millions of rural migrants fared even worse. For the Mid-Autumn Festival in October 2008, 70 million returned to their homes in the provinces, of whom only 56 million made the trip back to the cities after the break. Of those, according to World Bank estimates, 11 million were without jobs. Altogether, at least 20 million, and perhaps as many as 36 million, Chinese workers were left idle.11 Ever watchful for signs of domestic social unrest, Beijing knew that it had to react. Already on November 5 the State Council convened an emergency meeting to agree on a 4 trillion yuan ($586 billion) spending program. This amounted to a remarkable 12.5 percent of 2008 GDP. It was supplemental to existing investment plans and was to be disbursed by the end of 2010. It was the first truly large-scale fiscal response to the crisis worldwide. On Sunday, November 9, 2008, as the plan was revealed to the press, the State Council declared: “Over the past two months, the global financial crisis has been intensifying daily. . . . In expanding investment, we must be fast and he...