Chapter 1 Why China WorksChapter 1 Why China Works.docVIP

Chapter One Why China Works A look at bright spots in the recession begins with Beijing, where macro-economic control is looking smart. the recession refers to the?global recession of 2009 which was a global economic decline. The effects of this economic downturn are having a continued influence into 2014. The Great Recession affected the entire?world economy, with greater detriment to some countries than others, but overall, to a degree that made it the worst global recession since?World War II. ?It was a major?global recession?that was sparked by the outbreak of the U.S.?subprime mortgage crisis?and?financial crisis of 2007–08. The economic side effects of the?European sovereign debt crisis, austerity, high levels of?household debt, trade imbalances, high unemployment, and limited prospects for global growth in 2014, ?continue to provide obstacles for many countries to achieve a full recovery from the recession. (The U.S.?subprime mortgage crisis?was a nationwide banking emergency that coincided with the U.S. recession of December 2007-June 2009. It was triggered by a large decline in home prices, resulting in mortgage delinquencies and foreclosures and the devaluation of housing-related securities. Declines in residential investment preceded the recession and were followed by reductions in household spending and then business investment. ) (European sovereign debt crisis: refers to a period of time in which several European countries faced the collapse of financial institutions, high government debt and rapidly rising bond yield spreads in government securities. The European sovereign debt crisis started in 2008 with the collapse of Iceland’s banking system, and spread primarily to Greece, Iceland Portugal during 2009. The debt crisis led to a crisis of confidence for European businesses and economies. ) (In economics,?austerity?describes policies used by governments to reduce?budget deficits?during adverse economic conditions. These policies