ABSTRACT
The 'Xi era' began with the ending of China's three decades of hyper-economic growth. After the outbreak of the global financial crisis in 2008, the Chinese government introduced a massive four trillion yuan fiscal expansion plan to fund state investment and various tax cuts worth 500 billion yuan a year in 2009-10 to stimulate the economy. The study on the Chinese economy during the reform period finds that China's productivity growth before the mid-1990s was largely driven by dramatic policy improvements. The plausible scenario of rising social inequality through the early stage of industrialization paves the way to a period of social unrest, political instability, and economic slowdown. When industrialization is in its early stage, it is easier for a late developer to copy, imitate, and introduce the technology available from the forerunning economies. Financial reforms launched prior to the Third Plenum, the Party leadership pushes for interest rate liberalization as well as the Chinese currency's convertibility on capital account.
