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China’s Economic Policy in the Time of the Global Financial Crisis: Which Way Out?

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  • Margot Schüller
  • Yun Schüler-Zhou

Abstract

This contribution analyses the impact of the global financial crisis on the Chinese economy and the policies implemented by the Chinese government to cope with it. We argue, first, that China has not been able to decouple its economic performance from that of the U.S. and other developed countries. Second, although economic growth in the second quarter of 2009 showed that the stimulus package is working, the current development does not seem to be sustainable. In order to avoid another round of overheating, the government needs to adjust its stimulus policy. Third, the current crisis offers opportunities to conduct necessary structural adjustments in favour of more market-based and innovative industries, more investment by private companies and a stronger role of private consumption in economic growth. Fourth, with the external demand from the OECD countries declining, Chinese export companies need to further diversify their international markets and reorient their production and sales strategies to some extent towards the domestic market.

Suggested Citation

  • Margot Schüller & Yun Schüler-Zhou, 2009. "China’s Economic Policy in the Time of the Global Financial Crisis: Which Way Out?," Journal of Current Chinese Affairs - China aktuell, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 38(3), pages 165-181.
    • Handle: RePEc:gig:chaktu:v:38:y:2009:i:3:p:165-181
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    File URL: http://hup.sub.uni-hamburg.de/giga/jcca/article/view/65/65
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    References listed on IDEAS

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    1. Jean Pisani-Ferry & Indhira Santos, 2009. "Reshaping the global economy," Policy Contributions 291, Bruegel.
    2. Günter Schucher, 2009. "China’s Employment Crisis – A Stimulus for Policy Change?," Journal of Current Chinese Affairs - China aktuell, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 38(2), pages 121-144.
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    Cited by:

    1. Emily C. Blalock & Xiaojun Lyu, 2021. "Legitimate but “not for me”: The role of validation in migrant entrepreneur understanding of COVID‐19 business support policies in Shanghai," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1482-1508, September.

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