Relationship Between Chinese And American Financial Markets

Neurons communicate with one another along a synapse. Neurons are excitable cells that are activated via electrical or chemical signals. Nerve cells are an integral part of the nervous system. Neurons are made up of three distinct parts. The three integral parts of the neuron are the cell body, the dendrites, and the axon. The cell body is the middle portion of the neuron and contains the nucleus. It also contains the organelles such as the endoplasmic reticulum and the mitochondria.

The monetary policies of USA and China is analyzed here from the perspective of their implementing bodies, their choice of instruments, and their means of setting their interest rates. The analysis reveals that there are immense differences between the two countries resulting from the nature and degree of influence from their respective domestic political systems. The paper

Writing about myself has always been awkward. Retelling my personal stories hasn’t been easy for me either. But here I go.

The rise in China from a poor, stagnant country to a major economic power within a time span of twenty-eight years is often described by analysts as one of the greatest success stories in these present times. With China receiving an increase in the amount of trade business from many countries around the world, they may soon be a major competitor to surpass the U.S. China became the second largest economy, last year, overtaking Japan which had held that position since 1968 (Gallup). China could become the world’s largest economy in decades.

Before the China’s reform and opening-up in 1978, China for a long time to implement the planned economic system and the banking system is highly centralized. There wasn’t truly independent commercial bank in China between 1949 and 1978 and The People 's Bank of China is the only bank in this country. In that period, The People 's Bank of China took charge of commercial banking business, along with making macroeconomic policies and monetary policy. Since China began to implement market overhauls in the 1978, the Chinese banking industry developed in a more commercial and more market-oriented direction. It is reasonable to divide the 30-year- development into the following three periods.

In countries with well developed financial markets like the US, firms use the equity and debt markets to raise capital for their operations, instead of relying on just financial intermediaries such as banks. China’s financial markets, however, are relatively undeveloped, with equities and debt instruments combined accounting for <3% of total assets, as compared to 32% in the US (Xiong 2017). The stock market in China is heavily speculative with volatile prices, while the bond market is still in development. In the absence of well developed financial markets in China, the financial sector sector is dominated by financial intermediaries, mainly banks. Bank deposits are 85% of all financial assets in China, and these savings are invested

Close to four decades ago, China’s economy was under centrally-controlled, stagnant and isolated from the global economy. Then everything changed after 1979 when the foreign trade investment and free market reform was implemented. Not long after it was implement China’s become the world 's fastest growing economy and now the largest economy in the world surpassing even United States. Today, China is focusing on a more sustainable growth pattern and implementing changes to industry and economic structure.

From the establishment of China’s tenure on the United Nations Security Council (UNSC) in 1971, Beijing was notorious for taking a hard line against peacekeeping operations . Between 1971 and 1980, China condemned nearly all UN Peacekeeping Operations (UNPKO) and refused to contribute personnel or financial support. Largely this was due to a firm stance on respect for state sovereignty, an issue that was crucial to the survival of the PRC. Ideological differences between the United States and the Soviet Union, coupled with domestic concerns, also contributed to China’s inactive role on the SC. China had suffered greatly during the Cultural Revolution of the late 1960s and lacked both the financial stability and personnel to contribute to UNPKO. However, even in this state, China never utilized its veto power to block efforts of humanitarian intervention. China was afraid that any definitive stance would demonstrate favoritism on behalf of one of the two superpowers. On over 30 votes throughout the 1970s on peacekeeping missions, China remained silent by abstaining from UNSC votes.

The current state of the Chinese economic system has drawn international attention and praise due to its overwhelmingly positive statistical growth. This growth, according to the nation’s leader, stems from what its government calls strides toward common prosperity. As of 2013, China’s leaders proclaim to be moving toward a state of theoretical consciousness. In China, consistency and persistence is promoted over spontaneity within the confines of a sound economic structure, which has created a fertile ground for socialism to grow. A recent documentary composed by a conglomerate of media outlets, depicts the current economic landscape of China. Its story unravels to present the growing city of Shanghai as progressive, oppressive, and modern; yet, its growth has been rooted in older communist practices, given to much economic success and an uncertain future (“City of Dreams”). The changes that have taken place in modern China since the late 1970’s has grown its economy to unprecedented ends, and by unprecedented means. The transformation into an industrialized capitalistic society has catapulted its development into an uncharted realm, prompting much discussion on its future impact on the world at large. In the following report, we will examine China’s economical changes in three decades, encompassing three distinct phases of economic reform: recovery, establishment, and improvement.

In the past China was not to able sustain its own economic well being, let alone be an economic super power. The standard of living in China was so low, that something as simple as a light bulb was a luxury (Fogel, 2006). After the Cultural Revolution and Communism set in, China’s economic luck started to change. Between the years 1978 and 1998, a mere twenty years, China’s Gross Domestic Product (GDP) has grown an average of eight percent annually. The eight percent annual GDP growth has made China one of the fastest growing economies in the world (Fogel 2006).

After the establishment of the People’s Republic of China in 1949, the country started on the path to industrialisation in earnest. The hallmarks of industrialization were the consolidation of socialist governance and increased control over the domestic migration of labour, which paved the way for the administration of the planned economy.

In order to contend with the US Dollar, China’s central bank has devalued the Yuan nearly 2% in August 2015.This bank’ policy was seemed to be a wave to the Chinese market, even the economic market all around the world, which brought a series of fluctuation and impact to the economy. Why china took this monetary action to face with the problem from the US dollar (What are the factors)? What is the (Positive or negative) influence will be aroused in the short term by this Chinese Yuan depreciation? What will be happen if this devaluation last in the further and what will be affected by this monetary policy in the long term? The following text will answer and analyse these three questions.

The stock market crash has already influenced the world market, driving down investor’s confidence. The crash also hurts Chinese real economy. Banks lend money to investor for stocks, but can’t get money back. Now, banks face serious

The author warns of the existence of a bubble in the Chinese economy that will eventually result in a financial crisis. I agree with this position as this warning is based on solid facts that prove China’s credit vulnerability, and show the huge debt that the Chinese economy has accumulated in its effort to maintain its growth that could lead to a devastating banking crisis.

Since initiating a series of economic reforms and adopting the open policy in 1978, China’s economy has experienced a spectacular growth and achieved a remarkable success over the past three decades. In particular, according to the government figures released on August 16th 2010, China’s economy in the second quarter has slightly surpassed Japan’s in terms of gross domestic product. This milestone suggests that China is becoming the world’s second-largest economy behind the United States. At the same time, the opportunities created by the striking economic growth have led China’s most important investment markets, stock and real estate markets to undertake an enormous transformation and development. On one hand, since the two stock exchanges (Shanghai Stock Exchange & Shenzhen Stock Exchange) were launched in 1990, China’s stock market has served as a vehicle for financing and supporting the development and reform of State-Owned Enterprises. That is, within China’s bank-dominated financial system, stock market was restricted by a series of regulations and assumed only a secondary role in the financial economy. Not until the late 1990s did the stock market acquire an increasingly important strategic role in China’s economy. The stock market was vigorously promoted by relaxing regulations imposed on it and experienced tremendous growth in size and liquidity since the early twenty-first century (Lai & Yang, 2009, p.409-410).