Leo F. Goodstadt

in Reluctant Regulators

Published by Hong Kong University Press

Published in print April 2011 | ISBN: 9789888083251
Published online September 2011 | e-ISBN: 9789882207349 | DOI:

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Initially, many believed that China would not be affected by the international financial crisis. In fact, some even believed that China would be the one to relieve the world from its troubles. Prime Minister Wen Jiabao stated that he was confident that the 10 years of reform that the country had recently undergone would render it stable and would mean it would be able to endure the crisis. Also, this belief was furthered by a US$586 billion economic stimulus package that had been introduced in November 2008. Even after officials realized that the ability to maintain a stable export growth of manufacturing goods was in sharp decline, confidence persisted. The country continued to accumulate foreign reserves and its banks did not collapse. However, the banking industry appeared to be still susceptible to adverse effects, and the size of the country's financial system hindered policy-making. Also, competition had to be controlled and the role of foreign banks had to be restricted.

Keywords: China; Wen Jiabao; reform; economic stimulus package; foreign reserves; policy-making; foreign banks; competition

Chapter.  8768 words. 

Subjects: Business and Management

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