ABSTRACT

This chapter analyzes the causes of the abrupt change in fortune for the Chinese economy, and assesses China's policy responses to the global financial crisis. By characterizing China's growth pattern, especially the pattern since 2002, it provides a clearer understanding of the pros and cons of China's policy since 2003, and therefore a better grasp of China's future growth trajectory. This may lead, furthermore, to a greater ability to predict the results of China's macro-economic policy since November 2008. As the global financial and economic crisis is still unfolding, the growth strategy and economic policy of the Chinese Government are being put to the test. It seems that the government has been very successful in responding to the global slowdown in a very swift and determined fashion. As a result, the Chinese economy has already bottomed out. Otherwise, the Chinese economy may lose its growth momentum in the near future.