Monetary policy in china Coursework Example | Topics and Well Written Essays - 1500 words

Monetary policy in china - Coursework Example The money market of China is considered as an indicator for funding to the financial institutions and to the smaller banks existing in the economy. The financial system plays an important role in the growth and expansion of China. The economy of china is being considered as the second largest economy of the world. The financial system of China is mainly dominated by the banking sector. The banking sector contributes more than three fifth of its credit to the private sector. The main source of the economic growth of China is from the banking sector. The financial system of China has also undergone modifications with the end of monopoly in the banking sector of the country. The banking system of China mainly constitutes two third of the financial asset of the financial system. The financial intermediaries’ plays a crucial role in the financial system of the country. The four state owned banks of China mainly dominate the market. The household savings are conducted by the financial intermediaries under the pressure of the government of China. The monetary policy of China is very complex. In order to facilitate the growth an d development in the economy, the Central bank of china has invested cash in the financial system. The interest rates this country are almost zero therefore the central bank of the country has to switch to lower funding cost. The article reflects on the economic growth of China. China is experiencing a slowdown in the economic growth and development in the recent years. The growth has decreased to more than 7% in the first quarter. China has been experiencing a slowdown in its economy since 2009. But it has gained momentum in the recent years. This situation has created more pressure on the Central bank of the country to ease its fiscal and monetary policy. The cut in the interest rate has affected the liquidity position of the economy which has