what policies/measures did China's gvt implement?

Policies to overcome deflation

-One of the reasons for China’s slow economic growth is due to slower growth in fixed-asset investment. These property investments contribute a huge part to China’s GDP, thus when the housing properties in China dropped below the expectations of consumers, it made the consumers more cautious of investing in such properties. Without investments, economic growth of a country would be unstable in the short term, and poor performance of investment can pressurized the economy.

-Another reason for China’s slow economic growth is due to its imports and exports falling. It was reported that imports plunged by 16.2% in April this year. The trade surplus expanded around 65% as imports fell 18.1% and exports fell 2.8%.

3. Reasons to the changes of the urban unemployment rate -More availability of jobs 4. Why the unemployment rate for that certain year is high -Shortage of labor

-Demand for pork during Chinese New Year. People rush to buy things needed for Chinese New Year, causing an increase in prices of pork.

-CPI in china depends heavily on pork prices.

-The meat China citizens people prefer, is pork, thus pork makes up a huge component in the consumer basket.

-To push up China’s consumer index, pork prices are increased.

2) fall in food price

-There is a drop in global oil prices.

3) Excess supply of industrial goods (pushing prices down) -China’s excess manufacturing capacity brings down the costs of many goods and services.

-Excess supply of materials used in the real estate boom is pushing prices down.

-what China’s authorities measure are only those urban workers who are formally registered and thus eligible for unemployment benefits

- China's urban unemployment rate ticked down to 4.05% at the end of March from 4.1% at the end of 2014

- One solution to stabilizing the urban unemployment rate would be to create more job opportunities for the people of China. One example to substantiate this would be based on the fact that the government aims to create at least 10 million new jobs in 2015 and keep the urban jobless rate below 4.5% 

- Surveys are important for keeping track of data

The urban unemployment rate hovered between 4% and 4.5% in the last decade, even during the global financial crisis, partly because it does not account for China's 298 million migrant labor

To improve the data, the Chinese government devised a new jobless rate that is compiled through surveys

-“The People's Bank of China (PBOC) has made multiple cuts to guidance lending rates, and one cut to reserve requirement ratios at banks.” Even though the government has tried to minimise the consequences of the borrowing costs for the people of China but economists said these cuts have had little impact on real borrowing costs. Instead, the central bank should make a short-term loan to financial institutions. If the government do not do introduce more effective policies, the economy will still continue to be under recession.

-deposit insurance program

The People’s Bank Of China also launched a long-awaited deposit insurance program in April as part of their attempt to reduce the magnitude of the borrowing costs’ issue. Under this programme, the People’s Bank Of China can adjust the maximum amount of compensation according to the situation and potential risks, according to the regulations. Through this, the government hopes to protect its citizens’ finance. This proves that the China government are actually trying their best to help its economy recover and also, the government cares a lot for its citizens.

-Policies to expand social security

“China's State Council, the cabinet, said it would allow the national security fund to expand its investment scope to diversify risk, stabilize and increase investment returns.” From here, we can see that the China government is trying very hard to help its economy recover as by expanding the national security fund’s investment scope, it can not only secure and increase profits, but it also becomes a key determinant in stabilizing the economic growth of China and adjusting its economic structure.

-increased property transaction tax

-cut interest rates

Despite previous measures taken by China’s government to stimulate economic growth, it was not effective enough. In order to inject money into the economy, the Central People’s Bank of China has already reduced interest rates by more than 2 times since November 2014, and has also reduced the amount of cash in their reserve twice. By making such adjustment to the reserve requirements, “which is the amount of funds banks must hold against deposits in bank accounts”, (http://www.investopedia.com/ask/answers/07/central-banks.asp) the bank is capable of lending more money, and alongside with lower interest rates, there will be a greater supply of money in the economy, which will in turn boost economic activity.

- despite china having high gdp, their gdp per capita is low

2. More jobs could have been created by the government

3. However, the official unemployment rate may be understated because it excludes:

-Discouraged workers

-Part-time workers

-Underemployed workers

4. China's unemployment rate could have fallen due to lesser occurrence of Frictional,

Structural, Cyclical and Seasonal Unemployment

5.  People could have dropped out of the labor force, or fewer people decided to start 

 looking for work (Reference: http://blogs.wsj.com/numbers/why-did-the-unemployment-rate-drop-so-much-1341/)

2. Implement Fiscal Policy when Monetary Policy does not work

3. Reducing occupational immobility: Immobility is a cause of structural

unemployment

4. Reducing the geographical immobility of labour

5. Benefit and tax reforms

6. Boosting aggregate demand

7. Employment subsidies and/or employment tax cuts (demand-side policy)