Premium Essay

Economy of China

In: Business and Management

Submitted By shappy
Words 5342
Pages 22
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, it will need to place less emphasis on quantity-based liquidity controls and more on interest rate changes. Allowing greater exchange rate flexibility and putting more weight on an inflation objective would offer greater scope to tailor monetary policy to domestic macroeconomic conditions. Continuing financial market opening. Chinese financial institutions are now generally stronger and better...

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