Assignment -- 2

ABSTRACT ASSIGNMENT What Doesn’t Kill You Makes You Stronger: China and the Global Financial Crisis INTRODUCTION The current global financial crisis has seemingly only just begun to affect the world economy. American and European financial institutions have crumbled, there have been massive job losses, and world economic growth has slowed significantly (BBC News, 2008a). Over the last six months, the United States has lost 1.55 million jobs (BBC News, 2008b). Shocks are hitting the economies around the world, and some have been much worse than expected. This essay focuses on the effects of the financial crisis on China and recommends ways that China can lessen its impact. The purpose of this paper is to discuss the effects of the global financial crisis on the Chinese economy and the ways the Chinese government tried to deal with this challenge. China is not expected to enter a recession, but its economy is expected to slow its growth significantly. It is estimated that 10 million migrant workers had lost their jobs due to the crisis in November (Anderlini, 2008a). The Royal Bank of Scotland estimates that China’s growth could be as low as five percent (Anderlini, 2008b). The World Bank estimates China’s economic growth rate for 2009 will be 7.5 percent. The Gross Domestic Product (GDP) growth rate estimated to allow new Chinese graduates to obtain jobs is estimated to be eight percent (Rachman, 2008). Both of the mentioned estimates are lower than eight percent, and if either is accurate the effect on the Chinese economy will be very damaging. However, China is implementing an economic stimulus package in an attempt to counter these effects. This financial crisis has the potential to vastly change the Chinese economy. On one hand, social unrest caused by unemployment could cause serious problems for the entire country. On the other, the crisis may act as a catalyst which, in the long-run, may make China an even more formidable economic force than before. In any event, China should be prepared for the worst. This research paper will be divided into the following sections: China’s economic history and the urban-rural divide, the financial crisis and China’s stimulus strategy, an analysis of China’s economic systems, new economic problems, and recommendations for the future. Produce an abstract for this research paper. Your abstract must be 100 to 125 words in length.