CHINA

in response to Global
Recession and its
current Economy

Overview
Recession and its causes
Chinas response to
Recession
Fiscal Policy
Historic and Current
Economy of China

What is Recession?
A recession is a decline in a country's
gross domestic product (GDP) growth
for two or more consecutive quarters
of a year. A recession is also
preceded by several quarters of
slowing down.
http://www.rediff.com/money/2008/feb/14spec.htm

Causes of Recession
Consumer Looses Confidence to the growth of the
economy
spend less
Decreased in demand of goods and services
decrease in Production, Lay-offs, and a
sharp rise in employment
Investors spend less
Stock market Fall

CHINA IN
RECESSION?!

Fiscal policy
The State Council, or the Cabinet,
announced unveiled on Nov. 5, 2008
a 4-trillion-yuan (585.7 billion U.S.
dollars) stimulus package and shifted
the fiscal policy from "prudent" to
"proactive.

 The 4 trillion yuan was spent over

two years to 2010 to finance
programs in 10 major areas(mostly in
public service). A total of 1.18 trillion
yuan, or 29.5 percent of the total
package, is offered by the central
government. The remaining fund was
supplied by local governments and
the private sector.

 The stimulus package was invested

in key areas such as housing, rural
infrastructure, transportation, health
and education, environment,
industry, disaster rebuilding, incomebuilding, tax cuts, and finance.
The stimulus includes plans to
rebuild areas damaged by the 2008
Sichuan earthquake.

 Started investing in other countries

Spent more on social services
Strict collection of taxes

Reason for shifting of fiscal policy

The increase in government spending is
always the most effective way to
prevent economic slowdown and boost
the economic activities in a country.
The direct spending into the market
from government created more demand
in the domestic market against the
reduction in demand from foreign
market due to the global financial crisis.

CHINAS
HISTORIC and
CURRENT
ECONOMY

Employment demographics in
China
In 2012
Total population: 1.35 billion
Working age population (15-59 yrs
old)
- 937 million
767 million were employed

 The number of private enterprise

employees in urban areas increased
from 45.8 million in 2008 to 69.1
million in 2012.
The number of self-employed
workers in China increased by 44.8
percent to reach 52 million.

 In 2012:
- Around 33.6 percent worked in
primary industries.
- 30 .3 percent in secondary industries
(manufacturing and heavy industry).
- 36.1 percent in tertiary industries
such as services, finance, information
technology, sales.

 In addition, Chinas rapidly

expanding economy created a higher
demand for workers in industries
such as manufacturing and services
that have traditionally relied on
workers in their late teens and early
20s.
It create acute labour shortage in
other major manufacturing hubs as
factories, shops, restaurants and
hotels.

Causes Of Chinas Economic Growth

Main Factors:
Rapid productivity growth
The export sector was exposed to
competitive forces.

Members:
Antonio, Abigael
Bertumen, Marbie
Cruzata, Karen
Laurea, Blessie Faith Louisse
Silava, Anthea Marie

Sources:
Tradingeconomics.com
http://www.investopedia.com/terms/e/ex
pansionary_policy.asp
http://useconomy.about.com/od/glossar
y/g/Fiscal_Policy.htm
http://www.globaltimes.cn/content/8463
44.shtml
http://www.rediff.com/money/2008/feb/1
4spec.htm