Premium Essay

Current Economic Conditions and Macroeconomic Policy in China

In: Business and Management

Submitted By jimmy123qw
Words 339
Pages 2
Today



the macroeconomic conditions of our country is not so serious .

After 30 years’

reform, our country has already started to build up some policy in order to control

economical system .At present ,financial crisis is becoming a heated issue. Under

suchconditions , it is important to figure out what can be done by our country

onfiscal policy and monetary policy to achievement objective of the economy.

Internal economy



excessive reliance on foreign markets

Poor countries are better off pursuing outward-oriented policies. But our country

depends on foreign markets too much. We have been emphasized” pull domestic

consumption” for about ten years but cannot make a breakthrough all the time, and

domestic consumption rate is not rising but falling constantly.



Inflation cannot be stopped in a short time

Inflation’s occurrence and development is always lag behind an overheated economy

about several quarters. At present , China’s e

conomic growth rate slow down

slightly.But the inflation pressure will remain in the next period of time.International

oil, food prices’ increasing leads to the rising of the cost of production in China

.The

government should reasonably use the three monetary policy to control this .



Lacking of core technology and independent innovation

industry policy should be strengthen roundly,it seems a historical problems in

economy,Recent years, high and new technology products’ exp

ort is increasing fast !

In 2014. 80% produc

ts’ core technology are controlled by foreign

business man. So

some industries are not competitive ,but monopolized by some big corporations

Obviously.

External economy

The foreign economic policy influences



eg



American

)...

Similar Documents

Free Essay

Brics: the Vanguard of the Revolution

...Case Study The BRICs: Vanguard of The Revolution The BRICs, composed of Brazil, Russia, India, and China, are the future of the world’s most powerful economies and the current most accelerated emerging economies. Together they are home to nearly 2.8 billion people, about 40 percent of the planet’s population. They currently generate about 30 percent of world’s GDP. They have come a long way from the last 30 years or so, each one overcoming their own barriers and obstacles to achieve where they are today. They are all expecting to increase their income within the next 15-30 years exponentially, allowing for the economy to flourish and incorporate new markets that were otherwise less popular or almost non-existent. For example, cars in India and China were about 2 and 9 out of 100 people, respectively. They estimate that the total number of cars in both countries could rise from 150 million today to north of a billion by 2030. Not everything is positive however, there are skeptics who say there are problems such as the delusion that current trends will continue indefinitely and uninterrupted. That economic growth rates slow as the base of activity expands and advantages such as cheap labor or low-cost capital wane as growing demand increases marginal price pressures. That there’s always a black swan event, an unexpected, hard-to-predict impact that resets the game such as the internet, the collapse of the Soviet Union or the global financial crisis. Despite ever-present...

Words: 1322 - Pages: 6

Free Essay

Israel and China

...GLOBAL ECONOMIC DEVELOPMENTS Leticia Scheinkman Final Assignment 1.The first age of globalization came to an abrupt and painful end with the economic and financial crisis that engulfed the world starting in 1929. Is globalization again at risk as a result of our current global economic and financial crisis? What similarities between the two episodes suggest that globalization is again at risk? What differences suggest that it is not? What is your evaluation of the risks, at the moment, on balance? In Addition, READ the attached article: G20 Process- from the economist. First of all it is important to understand the socio-economic, politic and geographic situation that both 1929 and 2008 crises were based. The great depression which originated in 1929 in US and spread world over by 1930’s was characterized by barren business and huge unemployment. The main cause of this depression which took all the nations towards financial crises was crashing of the stock markets in 1929. Thousands of investors lost their money in stock markets, leading to a longest recession which comprised huge layoffs, unemployment , wiping out of business activities and which left millions of people depending on government or charity for food. Both episodes were preceded by rapid credit expansion and financial innovation that led to high leverage. However, while the 1920s credit boom was largely US-specific, the 2004-07 boom was global. With much higher levels of real and financial integration......

Words: 1365 - Pages: 6

Premium Essay

Econ 545 Final

...Business Economics ECON 545 Professor Ermias Weldemicael Week 6 Macroeconomic Analysis Situation B William Samarin August 15, 2014 Situation B Introduction In situation B, Cindy wants to start her own business where she installs solar panels. She has based her choice on what she perceives as the economic benefit of the cost savings of solar, both for businesses and homeowners plus the positive environmental impact of using solar. She has also heard that both the state and Federal government is offering incentives and rebates for the installation of solar panels to aid in the purchase of a solar system. The macroeconomic impact of her business decision needs to look at the effect of the solar industry on the gross domestic product of the United States, unemployment in the field, the fiscal policy impact, business cycles in the industry, and monetary policy and interest rates as well the international trade impacts of solar installations. Without an understanding of these areas, starting a new solar installation business could be a risk. Gross Domestic Product and Solar Gross domestic product is the market value of the final commodities and services that are produced by any country during a specific time period. In most cases this is measured over a single year (Hubbard, 2012). The gross domestic product (GDP) impact of the solar energy industry is seen in the creation of jobs in the specialized production of solar panels, the installation of solar......

Words: 1681 - Pages: 7

Free Essay

Gci - India, China

...A Short Report On EFFICIENCY ENHANCERS SUB INDEX (Comparison between INDIA and CHINA ) Submitted by P.Anila INTRODUCTION The Global Competitiveness Index (GCI) every year report will published by the World Economic Forum. The first report was released in 1979. The 2009-2010 report covers 133 major and emerging economies, down from 134 considered in the 2008-2009 report as Moldova was excluded due to lack of survey data. Switzerland leads the ranking as the most competitive economy in the world, as the United States, which ranked first for several years, fell to fourth place due to the consequences of the financial crisis of 2007–2010 and its macroeconomic instability. China continues its relative rise in the rankings reaching 27th. The report "assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity. The WEF defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. More competitive economies tend to be able to produce higher level of income for their citizens. Global Competitiveness shows the ability of a......

Words: 1481 - Pages: 6

Premium Essay

Rbi Policy

...RBI CREDIT POLICY announced on 03.05.2013 Monetary and Liquidity Measures Based on an assessment of the current macroeconomic situation, it has been decided to: • reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 per cent to 7.5 per cent with immediate effect; Consequently, the reverse repo rate under the LAF stands adjusted to 6.5 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 8.5 per cent with immediate effect. Introduction 2. Since the Reserve Bank’s Third Quarter Review (TQR) of January 2013, global financial market conditions have improved, but global economic activity has weakened. On the domestic front too, growth has decelerated significantly, even as inflation remains at a level which is not conducive for sustained economic growth. Although there has been notable softening of non-food manufactured products inflation, food inflation remains high, driving a wedge between wholesale price and consumer price inflation, and is exacerbating the challenge for monetary management in anchoring inflationary expectations. Global Economy 3. Global economic developments over the last few months present a mixed picture. US GDP estimates for Q4 of 2012 indicate a tentative upturn on the back of improvement in housing and payroll employment. However, US macroeconomic prospects are clouded by the uncertainty surrounding the temporary appropriations and the debt ceiling. In the euro area,......

Words: 1557 - Pages: 7

Premium Essay

Advantages And Consequences Of Renminbi

...1. Introduction This report is written in order to argue about the possibility of the economic implications and foreign exchange risk of the system of exchange rate for multinational companies with subsidiaries which are located in countries with systems such as managed floating exchange rate, fixed exchange rate linked to a basket of currencies and also a fixed exchange rate backed by a currency board system. Unlike the freely floating exchange rate system which has never been applied under its purest form, monetary authorities is required by the managed floating rate in order to interfere in foreign exchange markets to prevent the currencies from moving too far from an apparent fundamental value. 2. i. Managed Floating Rate More and more...

Words: 1497 - Pages: 6

Premium Essay

Money and Inflation

...Nepalese Context Money and Money Supply Money is the stock of assets that can be readily used to make transactions. Money supply is the quantity of money available in the economy. Money supply is considered as a major contributor to inflation. Monetary policy is the control over the money supply. Monetary policy is conducted by a country’s central bank. In Nepal, Nepal Rastra Bank serves as a central bank. There are different lags on the effect of money supply on inflation. M1 or Narrow Money Supply It is a category of the money supply that includes all physical money such as coins and currency; it also includes demand deposits, which are checking accounts. M1 is used to quantify the amount of money in circulation. M1 is a very liquid measure of the money supply, as it contains cash and assets that can quickly be converted to currency. M1=Currency + demand deposits, travelers’ checks, other checkable deposits M2 or Broad Money Supply It is a category within the money supply that includes M1 in addition to total time-related deposits, savings deposits, and non institutional money market funds. M2 is used when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions. In Nepal, Broad money supply, M2 has a lagged and temporary effect on inflation. However, compared to other factors such as India’s inflation and international oil prices, M2 has a minor role in contributing to Nepal’s inflation. M2= M1 + small......

Words: 1251 - Pages: 6

Premium Essay

Macro Economic Variables

...Macroeconomic Indicators from 2006-07 to 2011-12 | 2006-07 | 2007-08 | 2008-09 | 2009-10 | 2010-11 | 2011-12 | GDP (in crores) | 3953276 | 4582086 | 5303567 | 6091485 | 7157412 | 8279975 | Growth Rates | 9.6 | 9.3 | 6.7 | 8.4 | 8.4 | 6.9 | GNP (in crores) | 3920042 | 4561574 | 5270644 | 6053585 | 7078512 | 8198276 | Growth Rates | 9.5 | 9.7 | 6.5 | 8.4 | 7.9 | 7.0 | Inflation rates | 6.39 | 8.32 | 10.83 | 12.11 | 8.87 | 9.01 | Exports( rate of change) | 25.3 | 14.7 | 28.2 | 0.6 | 35.1 | 29.9 | Imports( rate of change) | 27.3 | 20.4 | 35.8 | -0.8 | 23.4 | 34.5 | Average Exchange Rates | | | | | | | 45.25 | 40.26 | 45.99 | 47.42 | 45.56 | 51.25 | WPI (% change) | 6.6 | 4.7 | 8.1 | 3.8 | 9.6 | 9.1 | CPI (% change) | 6.7 | 6.2 | 9.1 | 12.4 | 10.4 | 8.4 | Current Account Deficit(% GDP) | -1.0 | -1.3 | -2.3 | -2.8 | -2.7 | -3.7 | FDI Inflows( in mn) | 503573 | 797356 | 1397255 | 1309799 | 960150 | 1273623 | FII Inflows(in mn) | 14640 | 43325 | 8311 | 50361 | 41597 | 39177 | Macroeconomic variables are indicators that signal the current trends in the economy. Major challenges of macroeconomic policymaking include managing growth and price stability. After growing at 8.4% for 2009-10 and 2010-11 the growth rate fell down to 6.9%. This indicates a slowdown compared not just to the previous two years but 2003 to 2011 (except 2008-9). However, by any cross country analysis India remains among the front-runners. With agriculture and services...

Words: 1114 - Pages: 5

Premium Essay

Brics

...Global Economics Paper No: 192 Goldman Sachs Global Economics, Commodities and Strategy Research at https://360.gs.com The Long-Term Outlook for the BRICs and N-11 Post Crisis The BRIC and N-11 countries are emerging from the crisis better than the developed world. As a result, our long-term projections for the BRICs look more, rather than less, likely to be realised. It is now possible that China will become as big as the US by 2027, and the BRICs as big as the G7 by 2032. Within the BRICs and N-11, China, Brazil, India, Indonesia and the Philippines appear to be performing best. Bangladesh, Egypt, Korea, Nigeria, Turkey and Vietnam form a second group of countries that have performed broadly in line with expectations. Iran, Mexico, Pakistan and Russia have need for improvement. We show the ongoing dramatic BRIC influence in key product markets, with autos and crude oil as examples. Important disclosures appear at the back of this document Thanks to Dominic Wilson, Michael Buchanan, Paulo Leme and Swarnali Ahmed for their valuable comments, and to Alex Kelston for the Growth Environment Scores Jim O’Neill and Anna Stupnytska December 4, 2009 Goldman Sachs Global Economics, Commodities and Strategy Research Global Economics Paper Contents Summary Section 1. Where We Stand on the BRICs and N-11 Section 2. The BRICs and N-11 in the Aftermath of the Crisis 2.1 BRICs and N-11 Global Importance Continues to Rise 3 4 6 6 Higher growth......

Words: 13484 - Pages: 54

Premium Essay

Globalization

...Globalization Macroeconomics December 9, 2013 Lloyd Ruffle Globalization Globalization is a process of communication and integration between different parts of the world. Motivated by international trade and investment and supported by information technology this process has effects on political activities, economic development, the environment, culture, and human physical well-being (What is Globalization, 2013). Technology developments are conceived as a main driving force of most of the globalization process. As people, thoughts, information, and goods shift effortlessly around the world, the familiarity of people around the world become more alike. The Effect of Globalization As a parent globalization of education through technology is being promoted worldwide on a daily basis in our school system. With the use of technology in countries like North Africa and Asia, it is expected to make the education opportunities better for the students. It is leading to improve economies and more opportunities for students. In a classroom in one of those countries they are able to expose the students to international resources, worthwhile educational resources, which many students all over the world don’t have access to. Children in Indonesia for example are able to see the museum in London via technology, exposing them to many cultures and daily living. Globalization affects me as a consumer. The toys I bought my daughter for Christmas are all made in......

Words: 942 - Pages: 4

Premium Essay

561paper

...Topic: China’s financial liberalization Title: China’s financial liberalization and the policy transformation towards openness Author: Xuepan Cheng 4136801 Abstract This paper focused on the research of China’s financial liberalization reform in order to discuss the economic and financial effects casted by financial liberation. Also the article pointed out the current problems of China’s financial system and provided suggestions for implementation. The main argument of policy suggestions for China is to further lower down the financial limits, so that China will be able to build a better foundation for financial liberalization. Also the effective and constant supervision and modification of the financial regulation system is also necessary for maintaining a healthy macroeconomic environment and continuing capital flows. While the economic globalization, and financial liberalization has become a major tendency that attracts a lot of people’s attention in world economic development since the 1980s, the financial liberation and reform has become a necessity for China to develop it’s financial market and economy wellbeing. 1. Introduction China, as one of the fastest expanding economy in the world, is largely owing to the economic globalization, and financial liberalization since the 1980s. Economic globalization refers to the fact that economic resources (goods, capital, labor, technology, information and other transactions) flow from one country to another. This tendency......

Words: 2952 - Pages: 12

Free Essay

Economic Analysis

...China's macroeconomic imbalances: Causes and consequences Bank of Finland, BOFIT Institute for Economies in Transition BOFIT Discussion Papers Editor-in-Chief Laura Solanko BOFIT Discussion Papers 15/2011 20.06.2011 John Knight and Wei Wang: China's macroeconomic imbalances: Causes and consequences ISBN 978-952-462-711-5 ISSN 1456-5889 (online) This paper can be downloaded without charge from http://www.bof.fi/bofit. Suomen Pankki Helsinki 2011 BOFIT- Institute for Economies in Transition Bank of Finland BOFIT Discussion Papers 15/ 2011 Contents Abstract ................................................................................................................................ iii Tiivistelmä ........................................................................................................................... iv 1. Introduction ....................................................................................................................... 1 2. China’s macroeconomic imbalances ................................................................................. 2 3. China’s external imbalance ............................................................................................. 14 4. Reviewing the export surplus .......................................................................................... 22 5. The external surplus and foreign exchange reserves ....................................................... 23 6.......

Words: 13756 - Pages: 56

Premium Essay

Economy of China

...FEBRUARY 2010 Policy Brief ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Economic Survey of China, 2010 What are the key challenges facing the economy? How should the monetary policy framework evolve? What reforms are needed in financial and product markets? How should social safety nets be strengthened? How has the labour market evolved? Can pensions be enhanced? How should health care be improved? For further information For further reading Where to contact us? Summary Since the OECD’s first Economic Survey of China in 2005, China has continued to expand rapidly. The economy is also weathering the global crisis remarkably well, not least thanks to prompt and vigorous macroeconomic policy action. Economic expansion is projected to continue over the medium run, and China’s share in the world economy is set to grow further. Despite the recent decline in the current account surplus, some imbalances remain, notably an overly high national saving rate, but ongoing reforms can be expected to help alleviate them over time. Structural reform has continued on a broad front in recent years, with an increasing focus on the need for social cohesion. Even so, efforts are under way or still needed in a number of areas to sustain improvements in living standards over the longer run. Further upgrading the monetary policy framework. China’s monetary policy framework has gradually become more market-based, with money growth as the main intermediate target. Going forward,......

Words: 5342 - Pages: 22

Premium Essay

Global Political Economy of Pakistan

...PAKISTAN’S ECONOMIC FUTURE DR. ISHRAT HUSAIN Economists have a very poor track record of forecasting the future as the dynamic interactions between complex variables, an imperfect understanding of the non-economic factors and the occurrence of unanticipated exogenous shocks turn their judgements into hit and miss episodes. Despite these weaknesses economic forecasting flourishes as a discipline and the economists show indomitable courage to sketch out their scenarios of an uncertain and unknown future. This article therefore examines the past developments, current trends of Pakistani economy and the future global and regional outlook and builds the most likely scenario for the medium term economic prospects of the country (next 10 years or so) and then reviews the downside risks and upside gains around this scenario. 2. Pakistan is still a low income country and it would require at least next 14 years of 7 percent average annual GDP growth to double its per-capita income to around $ 2000 (official exchange rate conversion). This growth rate should also be able to reduce the incidence of poverty by half and meet the Millennium Development Goal. 3. It is easy to make this normative statement but more difficult question is how can this growth rate be achieved on a sustained basis? The prophets of doom and gloom in Pakistan (and there are plenty of them) who are constantly polluting the minds of our younger generation and turning them into cynics at very early age......

Words: 2214 - Pages: 9

Premium Essay

Country Report

...COUNTRY REPORT OVER CHINA Name: Course: Institution: Introduction In 2014, China experienced one of the biggest anti-corruption campaigns in its 65-year history, regarding the battle's scale, term, and the breadth and the levels of the captured authorities' positions. This battle is seen to have a country wide negative effect on China's general consumption. The effects are so particularly felt on the luxury purchases and the government related purchases. Indeed, in the current political environment and with a continuous decrease of the land division, the nation is still ready to keep up the development of its GDP with a shocking number of 7.5% in 2014. On the other hand, numerous reports from the macroeconomic business and worldwide financial organizations, (for example, the World Bank) have since anticipated a slower economic development for the current year, 2015. This paper provides a report on China's macroeconomic condition, particularly the position in the international trade and the contemporary policies in 2015. Macroeconomic Development China predominantly imports raw materials and in turn it predominantly exports industrial products, both developed and developing countries. It reported a trade surplus of US$ 49.6b and US$ 25.6b in December 2013 and 2013 respectively. Throughout last year, exports rose by 9.7% to US$ 227.5b in December. Interestingly, shipments tumbled to Japan at -7.2%. Figure1. In the appendix represent the trend of China’s Balance of......

Words: 4470 - Pages: 18