China in the Financial Crisis

Businesses have felt a sharp fall in customer flow in a commercial district in Tianjin.

Since the World Bank forecast China's 7.5 percent economic growth in 2009, the country has been bracing for an economic fall.

Effects of the global financial tsunami are apparent in China. The growth of the nation's industrial added value stood at 5.4 percent, rather than the expected 7 percent, in November 2008 – the lowest growth since 1999. The US $189.89 billion import/export volume over the same period also represented a 9 percent drop compared with 2007. Pessimism pervades the large clusters of export-oriented factories in the coastal areas of Guangdong and Zhejiang provinces, and there is much unease in the Shanghai financial center and in the political center of Beijing.

The Chinese government's swift, decisive response to the situation includes a RMB 4 trillion stimulus package, several interest rate cuts, and plans to build more affordable homes and expand social security. A program to resuscitate nine industrial sectors, including iron and steel, automobiles, petrochemicals and textiles, is also under discussion. It is hoped that an expanded fiscal policy will promote the national economy.