An Analysis On Characteristics And Effects Of The Active Financial Policy Of China

The fatal economic crisis happened 30's last century has broken down the magic of market which was once greatly advocated by those liberalism economists. Government's concern with economy is playing an increasingly important role in the development of most countries. Accordingly, researches on governmental behavior on economy has become a significant part of the macro-economics. Financial and monetary policy, the two main means that one government may take, could both contract the economics cycle and reduce the economics wave. It has been five years from the just beginning of the Asian finance Crisis in 1998 till now, while China has tried the active financial policy to fight against the deflation. During that half-decade, discussions on the policy have never been stopped. So far, no comprehensive and satisfactory papers on this active policy are put forward. This paper presented to you now is tending to make an all-sided evaluation on the policy based on the five years' application of China.I would like to point out that the theory and practice of the active financial policy in China are not the simple copies of those in western countries. Those in China have its own characteristic. Their remarkable effects on economics growth and the adjustment of Chinese economic structure should be well appreciated, while there are still some problems in the application. This paper is due to focus on the multiplier effects of the national debt investment and the risk of finance. Some suggestions are also raised at the end of this paper.