China’s Macro-policy and Regulatory Framework of the Financial Sector to be Tested by the Global Economic Slowdown

René W. H. Linden

Chapter 1 in New Issues in Financial and Credit Markets, 2010, pp 11-28 from Palgrave Macmillan

Abstract: Abstract Aside from GDP growth figures, by any measure, China is acquiring all the hallmarks of a developed nation in terms of internet-usage, auto sales figures, and Starbucks- and KFC-density. China increasingly influences global economic activities and amidst the global recession 2008/09, China’s stability has become crucial to containing the global financial crisis. In contrast to the Asian financial crisis of 1997/98, the global financial crisis of 2007/09 has adversely affected the growth of GDP, net exports and employment, even though it took a cautious approach to capital liberalization and the degree of integration into global financial markets was low compared to the EU and the USA. However, currently China is more resilient to external shocks than it was a decade ago. After years of prudent economic policy-making, the country has achieved remarkable fiscal consolidation and a strong external position. The soundness of the banking system, and the limited direct exposure of banks to sub-prime and related securitized financial products, have helped China to face the financial turmoil with confidence. In November 2008, the policy-makers responded with a proactive fiscal stimulus package combined with a rise in short-term credit to stimulate growth. These expansionary policy measures can be perfectly transformed into ready-for-use infrastructure projects without the risk that part of the stimulus package will leak away.

Keywords: Global Financial Crisis; Foreign Bank; General Accept Account Principle; Chinese Bank; Capital Adequacy Ratio (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-30218-1_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230302181

DOI: 10.1057/9780230302181_2

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().