China 'Unbalanced'

Abstract

In 2010, Wen Jiabao looked back at the financial crisis with some satisfaction. Using aggressive fiscal and monetary policy, China had weathered the crisis successfully, growing 8.7 percent annually in 2010. Most of the unemployed workers had returned to work, often demonstrating for higher wages or better working conditions. Wen, however, was really focused on his new development strategy - shifting away from export-led growth to ease domestic and international pressures. But many institutional challenges seemed to hamper domestic demand, and Wen was particularly concerned with pressures from America on China's policies for trade, exchange rates, energy, and investment.

Learning Objective: Illustrate the effect of domestic and international pressure.