China s Countermeasure to the Global Finance Crisis, and its Consequence

The purpose of this report is to clarify what countermeasure China took for the global finance crisis, and its consequence for China. Two years have already passed from the Lehman shock occurred in September 2008. China has already overcome a recession and attained V-shaped economic recovery, while the present situation of world economy is unstable and some of the Europe countries have still stagnated. China gained an international reputation following the recovery from the global finance crisis and its contribution to the world economy. The Chinese government adopted aggressive fiscal policy and moderately loose monetary policy to address economic crisis. But I think China s countermeasure to the global finance crisis caused more problems than it solves. It caused serious three problems; those are “unregulated loans of platform for fund procurement which was established by local governments”, “prosperity of public sector and decline of private sector” and “continuation of environmental disruption”. China is aiming for transformation of economic growth pattern that followed the scientific outlook on development. It is very important for China s sustainable and stable development to transform economic growth pattern. But from the long-term standpoint, China’s countermeasure put aside its transformation, what is more, made it more difficult to transform it. So it means that China has to develop an exit strategy as early as possible.