China’s Monetary and Fiscal Policies

China’s Monetary and Fiscal Policies

The government of China’s 13^th Five-Year Economic Plan, which commenced in 2016, emphasizes boosting domestic consumption and increasing innovation to lessen the dependence of the economy on heavy industry, exports, and government investments. However, more progress has been made in rebalancing the economy as opposed to subsidizing innovation. The capital, Beijing, is continuously decisive in its allocation of resources, but the government policies continuously emphasize stability and favor enterprises that are state-owned. The government pledged in 2010 to double the country’s GDP by 2020, and the economic plan targets 6.5% growth rates through 2020. China has, in recent years, renewed state-owned enterprises’ support in ‘economic security’ sectors in an attempt to foster industries that are globally competitive. Additionally, the government has continued to undermine some reforms through their reaffirmation of the state’s dominant role in the economy, a stand that threatens to make the economy inefficient and discourage private initiatives with time (WorldFactBook, 2019). Our assignment writing help is at affordable prices to students of all academic levels and academic disciplines.

The Chinese government employs the socialist market economy (SME). This system is based on public ownership as well as state-owned enterprises predominance (Xiaoqin, 2009). The finance minister heads the government business when it comes to fiscal policies in China. In 2018, the minister announced the country would adopt a fiscal policy that was more proactive and not result in strong stimulus policies deluge. The minister also said that the fiscal policy would be effective, flexible, and forward-looking to play a bigger part in promoting the development of high quality, economic restructuring, and boosting demand (Xinhua, 2018). The People’s Bank of China (PBOC), unlike the Federal Reserve, lacks a single primary tool for monetary policy. Instead, the PBOC utilizes multiple interest rate and money supply control methods. The tools used include various PBOC loans to banks, the requirement ratio of the reserve, and open market operations (Yen, 2018).

Other challenges that the Chinese economy faces include coastal to internal regional imbalances. The interior of China is as much a third-world country as ever, with the standards of living being very low. This is a challenge because, for the high growth rates of the economy to be sustained, the poor infrastructure will need to be attended to. Another challenge is the expenses and tax revenues; a falling GDP will result in a decline in Chinese government tax revenues. This is a major challenge, especially when considering that China is a communist country (Roach, 2019).

References

Roach, S (2019). China’s economic challenges in 2019. http://www.chinadaily.com.cn/a/201901/23/WS5c480eb4a3106c65c34e6153.html

WorldFactBook (2019). East Asia/South East Asia: China. https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

Xiaoqin (2009). The Socialist Market Economy: China and the World. China: Socialism, Capitalism, Market: Why Not? Where Next? Vol. 73, No. 2, pp. 235-241

Xinhua (2018). China to adopt more proactive fiscal policy: finance minister. http://www.xinhuanet.com/english/2018-10/07/c_137516843.htm

Yen, N.L. (2018). China’s monetary policy is complex and shifting. Here’s what you need to know. https://www.cnbc.com/2018/08/06/china-monetary-policy-how-pboc-controls-money-supply-interest-rate.html

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China’s Monetary and Fiscal Policies

Session 2 Final Milestone Part 2

Part II: Government, Fiscal Policy, Monetary Policy

Go back to the World Factbook and read the section on the government for your chosen country. What is the role of the government in the economy? Is it a free market economy? Is there legislative body that makes fiscal policy? What is the role of the Central Bank in making monetary policy in your chosen country? Are there any particular issues or challenges currently going on in your country? Go to the World Bank site for your country to find a current report. What additional issues do you find there?

As you research these questions, keep an accurate APA citation and reference list. This will help you build the

China’s Monetary and Fiscal Policies

Reference slide for your final assignment.

Part II should be 1 page in length (not counting cover and reference pages) and must be formatted according to APA guidelines.

Click on the Session 2 Final Milestone link to submit your assignment by the posted due-date. Review the rubric available in Due Dates and Grades for specific grading criteria.

Final Assignment Overview

Throughout this course you will be exploring and evaluating the economy and economic policies of an emerging or developing country of your choice. Final Milestone assignments in Sessions 1-4 (Parts I – IV) will walk you through this exploration, which will culminate with the addition of Part V and the creation of a presentation in Session 5.

• Session 1: Part I – Economic Analysis
• Session 2: Part II – Government, Fiscal Policy, and Monetary Policy
• Session 3: Part III – Impact of Current Issues on Economy
• Session 4: Part IV – Trade, Exports, and Imports
• Session 5: Part V – Economic Development and Presentation

Part I: Economic Snapshot (Due in Session 1)

Choose an emerging economy or developing economy for your Final Assignment. Use the resources at the World Factbook to create a “snapshot” of this country’s economic health. Use the macroeconomic indicators of GDP growth, inflation, and unemployment to determine the health of the current macro economy. Read the section on the economy of the country. What economic challenges in the country facing at this time?

Write a ½- to 1-page (not including cover and reference pages) economic analysis that is formatted according to APA requirements. Be sure to cite support for your analysis and include your reference in your reference page. (You will compile the references from each Milestone to create your reference slide for your final assignment in Session 5.)

Notes:

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