It was a potent symbol of a new world order on Tuesday when China raised interest rates for the fourth time this year in a desperate attempt to cool an overheated local economy. The move comes at a time when central bankers in the West are wondering whether they should be cutting the cost of borrowing to stave off a potential economic downturn caused by the current credit crisis.
The People's Bank of China increased the lending rate by 18 basis points (1.8 percentage points) to 7.2 percent arguing there was a need to "reasonably control credit growth and to stabilize inflationary expectations," but the move was also clearly designed to stall the continuing stampede into the red-hot Shanghai stock market.
The Chinese and some other Asian exchanges have been immune to the storms that have sent equity prices in New York and London into a downward spiral and the Far East economic boom has saved many Western stocks from falling much faster and further than they would have done without it.
Even so, some financial analysts are now beginning to question how long the world's most populous nation can continue to bail out Europe and the US before it too gets dragged into the mire as it raises interest rates further or finds demand for its goods slowing down in the US. Previous stock market crashes have often started in Asia or seen the region pull down global asset prices. But the current strength of China and other developing economies has set a different tone.
Andrew Milligan, head of global strategy at Standard Life Investments, points out that in the last sell-off in 1998 on the back of Russian bond defaults and the collapse of the LTCM hedge fund in the US, the world economy was performing quite badly.
"Japan and Asia were in a recession and industrial production growth across the world was really rather weak. This time round the US is not doing so well, but China and emerging markets have been doing really rather well. The world economy has got this safety net, this cushion of Chinese, Russian and Middle Eastern demand which is supporting activity for exporters in Europe and the US," he said.
China's growing industrial success has been built on providing everything from cut-price fridges and televisions to toys for Western, particularly US, consumers. A big downturn in spending at malls in Chicago will immediately impact on factory production in Shenzhen.
The China boom over the last few years has triggered a large increase in demand for raw materials sending the price of metals upwards and boosting the stock prices of companies such as miners and shipping firms.
Raw materials such as tin and nickel have reached record levels this year while stocks traded on the Shanghai exchange have risen by 85 percent this year and put on 30 percent of that in the second quarter of the year when markets were starting to crumble elsewhere.
By contrast, the Dow Jones Industrial Average of US stocks is up by 5 percent so far this year and the FTSE index of the leading 100 companies in London is down by almost 3 percent and the Nikkei in Japan by 7 percent.
Those figures mask the true scale of the upheaval in recent weeks since banks and other lenders began to admit their exposure to defaults in the US' high-risk subprime mortgage market. In the last six weeks the FTSE 100 has fallen by 9.4 percent while the wider market is down by a similar amount. Over the same period the Shanghai composite index has gone up by more than a quarter, boosted by continuing optimism.