Timeline of China’s Fiscal and Monetary Policy Since 1995
Here are some facts about China’s fiscal and monetary policies from the present back to 1995.
– Tight monetary policy (current)
Earlier this year, facing pressure from surging inflation, a resurgence in fixed-asset investment and excessive lending and liquidity, China decided to shift its monetary policy from “prudent” to “tight”.
Tight policy has included raising commercial banks’ reserve-requirement ratios, allowing the currency — renminbi (also called the yuan) — to appreciate and controlling bank lending.
The latest move was in June, when the central bank — People’s Bank of China (PBOC) — raised the reserve ratio by 1 percentage point in all: 0.5 point effective June 15 and another 0.5 point effective June 25. The rise on June 25 was the sixth this year and brought the ratio to a record 17.5 percent.
The tight policy appears to have had an impact. The consumer price index eased to 6.3 percent in July from a near 12-year high of 8.7 percent in February.
Economic growth slowed to 10.4 percent in the first half of 2008 from 11.9 percent for all of 2007.
– “Prudent” fiscal and monetary policies (2005-2007)
China switched to a “prudent” policy at the beginning of 2005. During 2005, the country reduced issues of long-term National Construction Bonds to 80 billion yuan (11.7 billion U.S. dollars) from 110 billion yuan the previous year and cut the fiscal deficitby 19.8 billion yuan to 300 billion yuan.
In 2007, the PBOC raised the reserve ratio 10 times, from 9 percent in January to 14.5 percent as of December. The central bank had raised the ratio only five times over six years since 2000.
– “Proactive” fiscal policy and “prudent” monetary policy (1998-2004)
The proactive fiscal policy and prudent monetary policy were adopted in 1998 to counteract the negative impact of the 1997 Asian financial crisis.
China issued 910 billion yuan worth of national bonds over these years and invested the proceeds in infrastructure. The move boosted domestic demand, which had been weakened by the financial crisis, and contributed 1.5 to 2 percentage points of national output growth each year.
– “Appropriately tight” fiscal and monetary policies (1995-1997)
To rein in high inflation that started in 1993, China imposed appropriately tight fiscal and monetary policies. There was a surge in fixed-asset investment in the latter half of 1992, which was followed by major food price rises in 1993.
After the new policies were launched, the PBOC stepped up efforts to control money supply and finally reduced the consumer price index from 21.2 percent in January to 12.3 percent in August in 1995. The annual price increase was kept under 15 percent and gradually leveled out in the following years.
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Question about monetary
What are the monetary considerations related to keeping a foster child?My wife and I are considering becoming foster parents for a relative child that the state of Illinois is (rightfully) taking away. We would love to take the child in but are worried that monetary stipends would not be enough to support the child.
I thought I made it clear; money is an issue because me and wife do not have the money to support a child right now, thats why we don't have any. If we could support a child without a stipend, we would have our own. I am asking this to you all because I am tired of hearing on various websites and from DCFS workers saying "your real reward is the love and compassion you feel from the child." Well sorry, I am not thinking about doing this for any reward, I am doing this because I feel we could help this child more since we are family than the foster care system can. However, money is an issue because if you can't feed the child, you can't really help him!!
- Business
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18 Responses
I'm sorry, but if you can't afford the child you shouldn't take him/her. I'd love to adopt several more children but know my limits. You should, too. It's not only your future that you are playing with.
hahahaa you americans are realy stupid
It doesn’t look so good does it? I won’t live in fear but I’d rather be safe than sorry and prepare. But most of all I will get busy doing what ever I can as a citizen to determine in what ways to work towards bringing this to an end. Mails, blogs, letters, faxes, marches, protests whatever it takes short of violence is what I am willing to do to help save this country for my children.
The U.S. went into the current recession as a consumer-driven economy: consumption in the US accounted for approximately 70% of GDP. But now consumers are deep in debt. Household debt went up to 140 percent of personal income, up from less than 80 percent in 1990. Households are struggling to pay it down, and this process could take years. Meanwhile, frightened consumers will be saving more: In the current recession, for example, the net financial balance of the private households has risen from -3.6% of GDP in 2006 to +5.6% in the first quarter of 2009. Such large increase in savings translates in a decline in consumption and means falling sales, production and further declines in GDP. This trend will put the US finances in better shape and reduce its dependence on foreign investment, but it will also restrict economic growth in 2010 and beyond. The bottom line: Consumer spending may pick up a bit as the recession fades, but it will not lead the way out of the recession.
Possible policy measures: (1) tax cuts, (2) monetary expansion, (3) government spending.
(1) With the increased savings rates, tax cuts are not an effective policy because a large portion of the additional disposable income generated by the tax cuts will be saved and not spent.
(2) With interest rates roughly zero and a recession that is the fruit of past irrational exuberance, conventional monetary policy has run out of room. The economy is likely in or close to a liquidity trap where monetary policy is ineffective since the interest rates cannot fall any further.
(3) Bottom line, this means that there is not much alternative than old fashioned fiscal policy in form of huge stimulus package(s) which will pull the economy out of the recession.
prepare for the bartering system
In very simple terms, monetary policy is control of the economy by controlling interest rates and fiscal policy is government actions via their budgets (tax and spending). Although monetary policy is a 'get them all' approach, fiscal policy can be directed toward specific industries. The influences of certain Monetary policies that adversely certain industries can be overcome in budgets (fiscal policies) to overcome these adverse affects.
@jobedied True Job True..Thanks for telling people this very truth..
It’s done, jump on hard assets especially gold and silver to prepare. Also, keep food, weapons and ammo because with this type of decline there will be some rough times. Hell, I bought a chainsaw last year and I’ve been stocking up wood like crazy. Just do whatever you can.
You can offer a bonus, or a higher commission on the MLS. In Texas, you cannot make the bonus contingent upon anything other than selling the house – for example, you cannot put "2K bonus for full price offer".
Commissions are not set, but it's not hard to figure out what the averages are in any given market. And I'd never thought that "the BEST agents always show their buyers the houses with the higher commissions", I always thought that fell to the "easiest to buy-off agents". But I do recognize that MANY agents will show a listing because of the higher commission offered – for this reason, I do recommend a higher commission (my side stays the average) be offered to the buyer's agent when I take a listing.
On the flip-side, I've sold many good deals to my buyers because there was no competition for a house that offered a less than average commission. I made less on that kind of transaction, but all their friends and relatives want me as their Realtor later – so I make more for that transaction.
explosions and crowd movement are those. I saw this film @ MovieWatcher[.]US
@Autotee2 You are right about this Autotee this is all in the Bible..TRUST AND LOVE GOD WILL ALL YOUR HEARTS>>JESUS IS KING OF KINGS AND LORD OF LORDS>>HIS KINGDOM WILL COME>>
7 years from date of last activity ..
GoOD LucK!
Ultimate goal: One world currency
Try to get as much growth with the least amount of inflation. Which is what they are doing now with a target inflation rate around 2%
It depends on how big the monetary base is.
According to monetarist theory the inflation rate is equal to the Quantity of Money X Velocity
Velocity of money measures the rate at which the money circulates in the economy. Low demand or spending would imply a low velocity in the currency.
Therefore, in theory, a low velocity of money coupled with a relatively large quantity of money would equal about the same inflation rate as a high velocity with a smaller quantity of money.
For example, the Fed can expand the money supply by printing more dollars to make open market purchases, lowering the bank to bank lending, but if high money demand should persist, it would result in low velocity and the inflation rate wouldn't change much. This is why it's possible to increase the money supply to a large extent and still not see inflation.
I don't think monetary economists care as much about a constant velocity of money, as they do in the rate of change of the velocity of money in a given time period. A positive change signals healthy demand while a negative change signals deflation.
Anyhow, you sparked my interest in this Issue again and I'm going to do some more reading on it. By the way, here's a pretty good source below.
Sure, but it is not tax deductible.
Think about it. If there is more money in the economy, money is more readily available. Consumers and firms are more willing to borrow money since they do not have to pay as high an interest rate on it as they did before, and thus economic activity increases.
Do not let fear take you over. Go to my page. I believe my outlook is the answer. Many are implementing this outlook. We are not powerless. Do not let fear take you over.
~Namaste