Strategy of tight policies keeps recession at bay - so far: Beijing has managed to ward off economic malaise by backpedaling on reforms, easing credit

Article Abstract:

China's promised economic reforms takes the backseat as the political pressures to keep its population employed prompts the government to tighten its foreign exchange policies. China was able to somewhat evade the Asian economic crisis with its policy of making the yuan partially convertible and its $140 bil in foreign currency reserves. But the political pressure to maintain high employment and hit its target of 8% growth for 1998 has the central government easing bank loans to state controlled enterprises. This is evident in the zinc industry where small zinc producers are increasing production despite losing money, due to the guarantees of loans from banks and the pressure to keep countryside workers employed.

China, Financial management, Government regulation, Monetary policy, Recessions

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The regional flu has affected China's economy, too

Article Abstract:

The Asian financial crisis is bound to upset China's economic reforms towards a more liberalized economy if only to stem the effects of the regional crisis on the country's economy. The crisis is bound to increase deflation in China, which the country can only address in terms of stricter access to its markets. Imposing stricter access to China's markets can scare foreign investors away from the market which can aggravate China's international trade.

Legislative Bodies, Finance, Column, Deflation (Finance), Deflation (Economics)

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