Book Summary

The book I am reading is titled "China Competing in the Global Economy" written by Wanda Tseng and Markus Rodlauer. This book describes the immense changes Chinas economy has seen in the last two decades. China now considered one of the largest economies, had experience considerable growth and is continuing to rise at a steady rate. This book lays out 4 broad areas in which the Chinese economy has largely focused on, Chinas growth dynamic, banking sector and reform including the SOE, macroeconomic stability and global integration.
Through global economic decline China has been able to keep their head above the water limiting debt and keeping high reserves. Chinas economy is growing at about 7 to 8 percent each year and is expected to continue this rate through fiscal and countercyclical policies. These policies have created support for domestic demand and in the process lowered the unemployment rate and created domestic revenue. The developing providences in China have continued to catch up to the higher income developed providences at a steady rate, mainly in part due to the accession of the WTO and their openness to trade.
Along with economics side, the book describes the financial spectrum of China and the integration of SOE's (state-owned enterprises). Despite recent gains the Chinas biggest threat involves their financial system especially in the SOE's. In order to continue economic growth China needs to enforce greater reforms and accelerate their credit culture. The rest of the book describes the future in which China is facing and the path they will need to take to continue this substantial growth. In the short run unemployment rates may rise but the main focus will be limiting debt in Chinese banks, also the movement toward a more flexible exchange rate will be the key to Chinas success.

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