China Being Buffeted from within and Without : An Analysis of its Macroeconomic Policies

Will China find its way out of the current predicament without resorting to expenditure-switching policies, and how? This paper attempts to approach the question from three perspectives: First, it discusses economic conditions that exist in China which are favourable to maintaining current exchange rates. Second, it examines unfavourable conditions with which China is afflicted in keeping its promise to the world, and some short-run macroeconomic stabilisation policies will also be compared to each other in the context of a downturn in economic growth. Finally, it reviews the export-led growth model adopted by Asian countries, and studies possible strategies China could take for long-run economic growth