Abstract
China has achieved wholly rapid growth, with economic reform and opening-up, since 1978. But the macro-economy is instable and showing prosperity and inflation, and Recession and deflation repeatedly with many times. Excessive fluctuations in the economy are due to macroeconomic policies’ amendments and adjustments, too loose or tight. Economic growth speeds up with macroeconomic fluctuations slowing down in recent years. Improvements in macroeconomic policies have played an important role. 2008 global financial turmoil, Because of the financial crisis in U.S., China's economy came to a standstill, and the relative policies were made with emergent adjustments. It is reasonable and essential that macroeconomic policy are amended and adjusted whether or not China's economy can overcome the crisis as soon as possible.
Highlights
Rising prices and increasing investments, the State Council issued a direction on local authorities and asked them to take administrative measures to control prices and compressing the scale of investment
Fixed-asset investment growth rate in 1989 dropped to -7.2%, CPI dropped to 3.1% percent, lower than the 14.9% over the previous year, retail sales dropped to 2.5%, GDP growth rate dropped to 3.1%
Strong administrative rules and tighter monetary policies, resulted in hard landing for the economy, rapid economic growth slipped to the bottom, from a macroeconomic overheating over a short period into the cold
Summary
Since 1978, China's economy has entered a new period of market-oriented reforms and economic quickly developments. In 1994, macroeconomic administration continued to advance tax, financial system, investment mechanism and enterprise reforms, at the same time, promoting reforms in the fields of health care, education, social security, and housing These reforms promoted macroeconomic management system to change from a planned economy to a market economy, learning from the mature market economies and macro-management mode, establishing the policy and governance structure of monetary and fiscal policy. Macroeconomic administration and the academic community generally believed that China's economy was in the transitory stage of market-oriented reforms, lack of an effective mechanism of risk for investment and financial activities, have not yet established, financing There being soft constraints in The financial relationship, which might be prone to impulse aimless investment and economic overheating, between state-owned enterprises and state-owned banks. Situations of low growth and high unemployment predicated that it was difficult to continue the tighter of monetary policy
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