China policy mix and economic performance over the last decade.

CONTENT

1.0 Executive Summary --------------------------------------------- 3

2.0 Introduction ------------------------------------------- 4

3.0 Date And Information Gathering Methods Used ------------ 5

4.0 Economic Performance From 1992 To 2003 -------------- 6

5.0 Economic Policy From 1992 To 2003 -------------------- 10

5.1 Monetary Policy ------------------------------------------ 10

5.2 Fiscal Policy ----------------------------------------------- 11

5.3 Supply Side Policy -------------------------------------- 13

6.0 Recommendations --------------------------------------------- 15

7.0 Conclusion ---------------------------------------------------- 16

1.0 Executive summary.

In China, from 1978 to 1992, it is process that from planned economy to have planned business economy. Since 1992, the system became to be more socialism economy system. The factor of market economy is increased. In 1992, when China putted forward socialism economy system, the macroeconomic policies begin started. From 1993 to 2003, China government adopted two opposite macroeconomic policies. The first which aimed at inflation in 1992 continued to 1997. The second aimed at deflation was from 1998 to 2004. Inflation declined steadily as macroeconomic policies were tightened to cool the overheated economy.

English: Detail from Government. Mural by Elihu Ve...

Hiroko Ota, Minister of State for Economic and Fis...

Fiscal policy

Prices began to fall in 1998, and this lasted until 2000. Deflation resurfaced during late 2001- end-2002, peaking in April 2002 at 1.3 percent(LiuTian.2005). Falling goods prices were more than accounted for this decline, as most service prices continued to increase moderately.

From 1992 to 2003, China government used fiscal policy, monetary policy and supply side policy for achieve their planned goal.

2.0 Introduction.

All the governments achieve their planned economic targets through the differing degrees of fiscal, monetary and supply side measures (Abel,A.B.and Bernanke,B.S,1991). During 1992-2003, China had a successful achievement. The percentage of 1992 GDP is 14.2% , percentage of 1997 GDP is 8.8% and percentage of 2003 GDP is 9.1%. There are two different macroeconomic policy. Therefore overheated economy became cool from 1992 to 1997 (Qiang He, 2003). However China had taken outspread policy when face South-east Asian...