Economic Crisis influence on China
Nowdays, the international financial crisis has made influence on China. The correction of the stock and housing market, the reduction of orders of coastal trade enterprises, discontinued bankruptcy and closing of some enterprises, financing of SMEs become more prominent, all those are representations. However, overally, China’s economic picture is still good under the background that the world economy is declining at a accelerating speed. The reason is that China has several advantages to confront the crisis.
First, huge foreign exchange reaerves. At present, 1900 trillion U.S. dollars foreign exchange reserves, that is enough to withstand the impact of external risks.
Second, the traditional virtue of saving and high saving rates. Chinese people has the traditional virtues of hard working and saving. The chinese government’s domestic debt and total external debt take up less than 60% of the GDP, so the financial liability risk is not high.
Third, rigorous and flexible, controlable and free foreign exchange management policy.
Fourth, broad space for development and huge domestic market. Broad space for development and strong domestic demand not only support sustained and rapid development of China’s economy, and alleviate the global financial crisis.
