Large-scale Investment In The Financial Crisis Role In Boosting China's Economic Growth

The impact on China's economy of the global financial crisis is far more serious than expected,and also it will affect China's economic and social development in the long term.In the context of the economic downturn,How to effectively cope with the global financial crisis and maintain economic growth and employment stability have become a great concern of the government.In this context,the government has decided to implement a proactive fiscal policy and a moderate monetary policy, including lauching an investment plan of 4 trillion before the end of 2010 for expanding domestic demand as a means of promoting economic growth.The expansion of the scale of investment will help stimulate economic growth, but the influence not only depends on the scale of investment,but also by the financial crisis.Facing the financial crisis,the economic outlook is with great uncertainty.The resulting reduction in external demand,declining consumer confidence,both had a negative effect on the large-scale investments.This study analyzes the background of large-scale investment on the financial crisis,also the causes and transmission mechanisms have been outlined.Then we give an analysis of the current financial crisis on China's economic growt,refining its impact on economic growth.Based on this analysis,we analysize the effect of large-scale investment on economic growth.How large will the 4 trillion large-scale investment boost China's economy? This study will show the background of 4 trillion investment plan,and estabilish partial closure of the input-output model based on input-output table in 2005 in line with the financial crisis,solve the model,explore their corresponding meaning in economics,it is estimate the combined effect resulting from thelarge-scale investment on China's economy.Giving a quantitative measurement of the 4 trillion investments on China's pull effect of output and GDP,this study review the reasonableness of the results of large-scale investment in China's economic growth.The results has strong practical significance,which can be relevant for decision-making departments to help develop more effective investment plan.