Chapter

The Global Financial Crisis: Impact on the Chinese Economy, Policy Responses, and Rebalancing Approach

Bin Zhang and Yongding Yu

in The Global Financial Crisis and Asia

Published in print October 2012 | ISBN: 9780199660957
Published online January 2013 | e-ISBN: 9780191748981 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199660957.003.0007
The Global Financial Crisis: Impact on the Chinese Economy, Policy Responses, and Rebalancing Approach

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As of the second half of 2008, the economy of the People's Republic of China (PRC) experienced dramatic fluctuations. The global financial crisis, together with a cyclical downward adjustment that started at the end of 2007, resulted in extreme reduction in inventories and production during the fourth quarter of 2008. The magnitude of the slowdown in the real economy was much greater than most economists had expected. The government quickly adopted a number of stimulus policies to avoid further slowdown of the real economy. The chapter reviews the impacts of global financial crisis on the Chinese economy. Then, it discusses key policy measures the PRC government had adopted to deal with the crisis and their results. Finally, it identifies some issues that the PRC's government must pay greater attention to sustain its growth momentum.

Keywords: Chinese economy; financial crisis; policy measures; impact of crisis; growth; stimulus policies

Chapter.  7802 words.  Illustrated.

Subjects: Financial Markets

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