Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.

Abstract

This structured assignment is to accompany the case ''208-026-1''. The abstract of the case is as follows: The overly fast growth of the household savings rate seemed to have a negative effect on the country''s macro-economic structure, as it led to an imbalance between savings and consumption. This huge growth in savings had resulted from the growing tendency to accumulate large savings because of future economic insecurity, such as rising expenditure and unemployment. The One Child Policy implemented in 1979 also had positive effects on savings, as people had to spend less. This put an increased pressure on the banking sector due to the creation of a huge amount of idle funds. Some of the measures needed to decrease the economic imbalance of consumption and savings were: (1) promotion of consumption; (2) curtailment of forces that drive savings; (3) proper income distribution system; (4) removal of the non-tax burden for farmers; (5) nine years of compulsory education, free of charge; (6) low cost of housing; and (7) formation of a healthy capital market. It remained to be seen whether the Chinese Government had the foresight and political will to introduce the much-needed shift from savings to consumption, which stood out as a considerable challenge to the communist propaganda of non-materialism.
Location:
Other setting(s):
2007

About

Abstract

This structured assignment is to accompany the case ''208-026-1''. The abstract of the case is as follows: The overly fast growth of the household savings rate seemed to have a negative effect on the country''s macro-economic structure, as it led to an imbalance between savings and consumption. This huge growth in savings had resulted from the growing tendency to accumulate large savings because of future economic insecurity, such as rising expenditure and unemployment. The One Child Policy implemented in 1979 also had positive effects on savings, as people had to spend less. This put an increased pressure on the banking sector due to the creation of a huge amount of idle funds. Some of the measures needed to decrease the economic imbalance of consumption and savings were: (1) promotion of consumption; (2) curtailment of forces that drive savings; (3) proper income distribution system; (4) removal of the non-tax burden for farmers; (5) nine years of compulsory education, free of charge; (6) low cost of housing; and (7) formation of a healthy capital market. It remained to be seen whether the Chinese Government had the foresight and political will to introduce the much-needed shift from savings to consumption, which stood out as a considerable challenge to the communist propaganda of non-materialism.

Settings

Location:
Other setting(s):
2007

Related