Professional Documents
Culture Documents
Autori:
Andrea Agostini,
Valentina Merani,
Charles Turay,
Caterina Schimizzi
The Chinese
Since 20 years the Chinese economy has a
development
very important role in the international scene,
An incredible growth
CHANGES IN ECONOMY
AGRICULTURE
China is one of the world's largest producers and
consumers of agricultural products.
Today Agriculture contributes for around 10% of
China's GDP.
In the nineties we assist to a crises in the rural world.
The profitability of the grain cultivation decrease because
the prices, state-controlled, increase less than the
production costs.
Many farmers leave the grain cultivation for other activity
and between 1979 and 2000 the sowned surface decrease
of 12%.
To finance the social service and the infrastructure the
government multiply the taxes, and the campaigns suffer
insufficient investment: the poor regions miss the
Industry
Industry and construction account for 46.8]% of China's
GDP. Around 8% of the total manufacturing output in the
world comes from China itself. China ranks third worldwide
in industrial output.
China is the largest producer of steel in the world.
Since the founding of the People's Republic, industrial
development has been given considerable attention.
Among the various industrial branches the machinebuilding and metallurgical industries have received
the highest priority. These two areas alone now
account for about 2030 percent of the total gross value
of industrial output
Import-export
The vast majority of China's imports consists of
industrial supplies and capital goods, notably machinery
and high-technology equipment, the majority of which
comes from the developed countries, primarily Japan and
the United States.
Regionally, almost half of China's imports come from East
and Southeast Asia, and about one-fourth of China's
exports go to the same destinations.
About 80 percent of China's exports consist of
manufactured goods, most of which are textiles and
electronic equipment, with agricultural products
and chemicals constituting the remainder.
Out of the five busiest ports in the world, three are
in China.
(% of GDP)
(% of GDP)
Financial system
the entire financial system has a high proportion of
savings and investments of the population.
The total value of deposits at the end of 2005, it has
approached to 160% of GDP while the share of these
deposits used by banks to extend credit in the economy of
the country was greater than 100% of GDP.
This indicates the dominant role of banks in the
Chinese financial system.
China's economy is mainly financed by bank loans:
loans granted by banks in the first quarter 2006 were
87% of the total funds raised by domestic nonfinancial sector.
Moreover, the presence of not yet very developed bond
market does not allow companies to diversify their
sources of research funding.
CBRC
Recapitalize and restructure the Big Four into jointstock banks (strenghtening the balance sheets)
Foreign Banks
2006 removing of all
geographic and (most)
business restrictions for foreign
banks. Nevertheless rather
small role.
Often geographically focused (I.E.
Shangai) as they cannot
compete with Chinese banks in
term of the number of
branches
Precautions
Asymmetric information
Adverse selection and moral hazard
Mitigating the problem
Recommendation and
Conclusion
Increase information to investors
Monitoring and control of credit rating
institutions
Diversification of loan portfolio
Encourage small banks to raise capital
Minimization of the financial panic
How sound and safe is the China's financial
system?
Issued in 1948
RMB gradually
depreciated to enhance
the competitivity of
Chinese exports
1994 lowest value 8.62 RMB per USD
RMB undervalued by
Conclusions
Yuan undervaluation is source of increasing tension in world
economy;
As stated by the President of the International Monetary Fund,
Dominique Strauss-Kahn in an interview:
'' If we want to avoid creating the conditions for a new crisis,
China should accelerate the process of revaluation; the economic
policies implemented by China to manage the crisis are going in
the right direction''