What is wrong with china’s economy
China Economy Slows, Migrant Workers Head Home It is a concern which now has Chinese is a matter of time to see solutions in sight.
What is wrong with china’s economy them changes economic are sucedinedo of form very fast that is must have strategies unique to be able to control them changes.
The more rapid and effective is controls indices of interest,what is wrong with china’s economy must be ever alert to these changes.
Political monetary shock
He Bank central of China is down quickly the types of interest to stimulate the growth economic. The central bank also reduced the coefficient of box (also called legal reserves) banks can provide more money.
The intention of the authority monetary is ensure a large supply of liquidity in the system banking to encourage the growth of them loans. Is is, in short, of make use of the political monetary for support of the growth economic.
Although the growth economic of China is keeps high, 9%, the situation is is deteriorating rapidly. The crisis in the industry advances, as already pointed out makes months in this blog of economy, and the market real estate is impaired to steps fast.
Increase layoffs in factories and industrial sectors such as steel and electricity are contracting. As consequence increases the desampleo, increases the labor disputes and thousands of workers are demonstrating in the streets with violence.
Expansionary fiscal policy
If the political monetary not out enough to relaunch the economy the Government has approved a package of expenditure public valued in 586.000 million of dollars (equivalent to the half of the GDP of Spain).
Depreciation of the exchange rate
Moreover, with interest rates low, the yuan depreciated. A weaker yuan encourages the exportacionespor that stimulates economic growth. This depreciation of the yuan is going to be rather than discussed in the Summit Economic semi-annual between U.S. and Chinese, that begins tomorrow in Beijing.
He type of change has been, during years, theme central in them sessions earlier of those meetings, in which Washington argued that the yuan was undervalued and urged to the Government Chinese that let float the currency. A further depreciation of the yuan annoy, still more, to the American.
In short, the Chinese Government is taking all the weaponry to combat the crisis: expansionary monetary policy, increase public expenditure and depreciation of the yuan in anticipation that the economic situation worse.
This combination of expansionary policies is a clear demonstration of the concern of the Government by the effects that can have on the Chinese economy the deterioration of the global economy.