Govenrment and Business Environment Case Study

Chinese Economy: Structural Problems and Bank Overlending

OR

Abstract:
The last two decades of the 20th century witnessed rapid economic growth in China with the growth reaching 9.1% in 2003. However, the growth was widely opined to be unbalanced on account of the majority of investments being in a few key sectors. It was apprehended that such huge investments in a few key industries coupled with reckless lending by the major commercial banks might lead to an inflationary situation in the country.

Pedagogical Objectives:

• To discuss the factors that led to the overheating of some sectors of the Chinese economy, the blind investments by the Chinese banks and the steps taken by the Chinese government to usher in a balanced and sustainable economic growth of the nation.

Keywords : Economic Crisis Case Study, China, National Bureau of Statistics, State Development and Reform Commission, Blind investments, Broad money (M2), Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China, GD Midea Holding Co, KPMG, China Bank Regulatory Commission (CBRC), General Motors, Volkswagen, Toyota