During 2008, Chinese exports fell from 37% of GDP to 24%, and China's GDP fell from an excessively high 14% annual rate in the first quarter to about 6% in the third quarter. [4] The Chinese government reacted quickly to this drop by implementing a counter-cyclical stimulus plan worth 4,000 billion yuan, or $600 billion, which is about 12.5% of GDP, which is probably the largest peacetime stimulus (Zhao, 2017). The plan combined additional budget expenditures and an active monetary policy. Government spending increased by 26 percent in 2008 compared to 23 percent in 2007, but the pace of spending growth slowed slightly in 2009. percent in 2008 (Jetin, 2011).
The plan was to mitigate the impact of falling exports on demand by pouring massive investments into various sectors of the economy, as this was the only immediate tool. Domestic consumption could not offset the impact of the crisis because it would require wage increases that the government and companies were not prepared to allow. Therefore, the government has instructed banks to provide large loans mainly to state-owned enterprises, but also to private companies to finance this wave of investments. Local governments immediately rushed to create financing mechanisms (LGFVs) to capture some of the investments. The central government has ordered regional authorities to build roads, bridges, and other public works to keep workers employed and the economy afloat. Interest rates have been lowered. This caused rampant loans, which led to a sharp increase in the number of non-performing loans in the economy. China's non-financial debt, which amounted to about 140% of GDP between 2002 and 2006, grew steadily from 145% in December 2007 to 256% of GDP ten years later, at the end of 2017 [5].
The plan was a success in the short term. The growth rate returned to 10% in 2010 due to a jump in investment rates, which reached 48% that year compared with 41% in 2007 before the crisis. [6] But this could not stop and reverse the deep-rooted trend that is the structural decline of Chinese economic growth.
All emerging economies go through two stages in their historical development process. The first stage involves high growth rates based on the mobilization of existing national resources, the hiring of previously underemployed labor, and capital accumulation in fixed assets. This can be called an extensive growth regime. This usually contributes to accelerated growth and deep, profound changes with intense internal migration from rural to urban areas and from agriculture to industry and services.
When all resources, labor and productive capital are fully utilized and if they are able to increase labor productivity by creating an effective national innovation system, emerging market economies will move to the second stage of development. Otherwise, they will fall into the so-called middle income trap. But even if emerging economies avoid this trap and adopt what we might call an intensive growth regime, annual economic growth will inevitably slow down in the long run. China had just switched from extensive to intensive growth when it was affected by the Great Recession. This makes the transition difficult, as the prolonged slowdown in the global economy and, in particular, global trade has deprived China of an important component of demand - high net exports. Figure 2 shows that net exports reached an exceptionally high level of 9% of GDP in 2007, compared with 2% in 2000. Avant de placer votre premier pari, assurez-vous de disposer du maximum de fonds possible sur votre nouveau compte. La méthode imparable pour y parvenir est d'utiliser le
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