IV:Innovation and Adaptation: China's Strategic Responses to Challenges
The 1997 Asian financial crisis severely impacted many of China's neighbors, but China emerged relatively unscathed due to its closed capital account and fixed exchange rate. However, China did not ignore the crisis—— it actively taken measures to prevent its spread, leveraging the crisis to promote regional interests. Domestically, China implemented expansionary monetary and fiscal policies to sustain economic growth as export demand fell across the region. The People's Bank of China cut interest rate, increased money supply, and lowered reserve requirements for banks to encourage lending. The chinese government also has made the decision not to devalue the Chinese yuan . In order to shield China from the impacts of crises and ensure steady economic growth domestically, the government has further increased investment in infrastructure spending. Source: Investopedia Internationally, China provided pragmatic support to
