Describe and evaluate the main macroeconomic policies used by the Essay - 2

Describe and evaluate the main macroeconomic policies used by the Government and Central Bank of China over the last two years - Essay Example Resultantly, China made an agreement with the International Monetary Fund that saw it joining the World Trade Organization and from then, the country has world-record economic advancements from dominating in foreign trade and multiple influxes of extraneous nonstop investments. In the management of any economy, the state and authority have the obligation of approving the contradictory policies (especially for currency) because failure to this results to instability of currency both at home and around the globe, mostly a decrease in value. This is a nightmare for any country or market so the monetary authorities enforce all the conflicting policies to avoid such a situation. Most of the business gurus and specialists argue that it is impossible for a country or economy to have utter investment suppleness, stable exchange rate and sovereign pecuniary policy all at the same time; definitely, at a particular time, one of these three factors changes. For the last two years, they has been a steady rise of influxes of international capital into China with the above issue of having all the three factors emerging everywhere around the country; however, the core facilitator of this is the projected escalation in value of the RMB chattels after its rise (Flassbeck 20 14). As of mid-2013, China’s extraneous exchange investments were over three thousand billion dollars, which was around three quarters of the assets of the core bank in China, PBC; resultantly, the government has contributed greatly to this, especially with its increased persistence on the matter of appreciating RMB. During a period of ten years (2003-2013), China’s funds multiplied by eleven times with a greater increase margin for foreign exchange; obviously, this development over such a period is impressive for any economy. Decisively, the central bank of China (People’s Bank of China) lay out policies and initiatives for stability