So, this is the hole we are in now. Trade is diminishing for both countries, meaning that neither of them can export their way out of crisis. It is obvious that China doesn’t have the capacity to take in a huge amount US exports due to low domestic demand, and it is true vice versa. It is also unrealistic to expect a sudden structural change that boosts enough domestic demand in China to allow it to escape the coming downturn of apocalypse scale when US and Europe have been doing the best they can to cement their paths to economic suicide, and especially when it had been given a decade to do just that.
Paul Krugman said it already back in 2009:
…recessions caused by financial crisis typically end with export booms, with the trade balance improving, on average, by more than 3 percent of GDP. I find this a disturbing result: we’re now suffering from a global financial crisis, which means that the usual driver of recovery will only be available if we can find another planet to export to.
So what have the world leaders been doing in the meantime? Watching the world burns, is what.