Study The Possibility Of Chinese Economic Crisis

Since its first burst in England in1825, economic crises has become the factor that significantly influenced the working of macro economy. The economic crises theory has also been improved and perfected with the break out of crises in different period.The purpose of this paper, is to find out the common reasons of economic crises, through the analysis of three crises in history, which is the great depression in U.S. A in1929, the Japanese economy bubbles in1991, and the subprime crises in2008, and finally to give some suggestion to the economic problem what China is confronted with now. The short term common reason of these crises is the bubble burst of the stock market or real estate market, which mainly derived from the easy monetary policy, such as the low real interest rate, the high bank credit growth, and the significant increase of the real estate loan from commercial bank. For long term, the wealth inequality and the negative demographic factor also slowed down the economic growth. Based on the international experience, we analyzed the prevailing monetary policy, bubbles in stock and real estate market, risk from financial system, inequality, demographic factor and the process of urbanization in detail, and finally made a systematic evaluation of the possibility of economic crises burst in China.