China Problems
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Reforms
Growth rate changed after 1978 changed drastically; grew by 10% YOY for 3 decades
PPP means calculation of GDP without considering exchange rate
In 2014, they surpassed US in terms of GDP(PPP)
Industry value added means industry as a % of GDP
They walked towards manufacturing and that is what led to such a change
Consumption pattern
Switched to internal investment after 2008
Real Estate boom
Movie HER
Inject money into economy: printing money OR keep interest rate low
China’s central Bank has the world’s largest balance sheet
Debt to gdp, gross external debt constantly increasing
Export to consumer led economy
Decline in volume of trade, falling Australian dollar coz of less imports by China
Share of investment to GDP was really high for past 6-7 years
Consumption led model
Slow growth- As long as there are useful investments to make, then growth fuels more growth. You build a mine to dig for coal, then you build a power plant to burn the coal, then you build a cement plant to use the electricity, then you build a factory to manufacture more mining equipment, and so forth. Once you start running out of investments, however, this accelerator process is going to collapse, and the sustainable rate of growth will slow dramatically — even if you pull off the switch to consumption.
The Second Phase of the Indian Banking evolution is from 1947-1991.
The Industrial Policy Resolution in 1948 adopted by the Government of India after independence in the year 1947 envisaged India to be a mixed economy and since then all measures taken by the government have been towards this direction. Since then there has been increasing involvement of state in the different segments of the economy including bank and finance.
As discussed earlier there was an urgent need for the intervention of the government in order to have a balanced growth in the economy. Thus in 1969 fourteen private banks with deposits exceeding 50 crore were nationalized
In the year 1980 six other private banks with deposits exceeding 200 crore were nationalized.
As every coin has two sides so did the nationalization of