The period since China’s accession to the WTO in 2001 has been characterised by: falling real rates of interest; rising debt as a share of GDP; and weaker economic growth, particularly across the advanced economies. In this In Depth we explore these developments in the context of an economic game between two heavy-weights: the US and China. We find that, by failing to co-operate, their interactions have driven the global economy to an inefficient, but stable equilibrium, where China exports capital to the rest of the world, driving down the prevailing real rate of interest and with it economic growth. To escape this bad equilibrium, a game-changing intervention by one or more of the large trading nations is likely to…