A Comparative Study of Policies in China and the Us Tackling the International Financial Crisis
A comparative study of policies in China and the US tackling the international financial crisis
In 1930s, with the financial globalization, interaction and integration, countries all around the world have gradually opened their doors to the whole world, which, means they are no longer isolated in their own financial market but now related to others. As a result, financial crisis became very contagious as well. The crisis erupted in one country affected not only the economy of itself but the area around it and even the whole world. So it could also been seen as the globalization of financial crisis.
In 2007, the sub-prime mortgage crisis that started from US swept UK, Japan,Europe,China and other developed and developing countries. This global financial crisis had tremendous damage on global economy, slowing down the economic growth rate and causing more serious problems than the case of Southeast Asian in 1997. After the crisis happening, the United States, Europe, the United Kingdom, Japan and some other countries reacted quickly to take measures to protecting their national financial systems and economy by fiscal and monetary policies:cutting the rate of interest, injecting to the market, reducing tax and increasing public spending. China was not directly impacted by the crisis as its financial market was not fully liberalized yet with capital controls. But the indirect effects were so large that China had to adopt an expansionary fiscal policy and moderately easy monetary policy to eliminate the influence and expand domestic demand to boost economic growth.
The main purpose of this paper is to find a effective way to control financial risk and illustrate how to avoid a financial crisis by analyzing policies of different countries dealing with global financial crisis and how to reach economic prosperous.
In the course of economic and financial globalization, international financial capital flow had grown
In 1930s, with the financial globalization, interaction and integration, countries all around the world have gradually opened their doors to the whole world, which, means they are no longer isolated in their own financial market but now related to others. As a result, financial crisis became very contagious as well. The crisis erupted in one country affected not only the economy of itself but the area around it and even the whole world. So it could also been seen as the globalization of financial crisis.
In 2007, the sub-prime mortgage crisis that started from US swept UK, Japan,Europe,China and other developed and developing countries. This global financial crisis had tremendous damage on global economy, slowing down the economic growth rate and causing more serious problems than the case of Southeast Asian in 1997. After the crisis happening, the United States, Europe, the United Kingdom, Japan and some other countries reacted quickly to take measures to protecting their national financial systems and economy by fiscal and monetary policies:cutting the rate of interest, injecting to the market, reducing tax and increasing public spending. China was not directly impacted by the crisis as its financial market was not fully liberalized yet with capital controls. But the indirect effects were so large that China had to adopt an expansionary fiscal policy and moderately easy monetary policy to eliminate the influence and expand domestic demand to boost economic growth.
The main purpose of this paper is to find a effective way to control financial risk and illustrate how to avoid a financial crisis by analyzing policies of different countries dealing with global financial crisis and how to reach economic prosperous.
In the course of economic and financial globalization, international financial capital flow had grown
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