Currently,China's expansionary fiscal policy and tight monetary policy have formed an opposing policy mix.This is due to the imbalanced macroeconomy,which suffers from the pressures of inflation and slow growth.In response to economic changes,China adjusted its monetary policy as the real economy has a weak demand for money.In its reactions to the financial crisis,China adopted a series ofpolicies different from those implemented in European andAmerican countries.For this mix of opposing fiscal and monetary policies to be effective,three conditions should be met:the adjustment of direction should fit the real imbalanced economic situation;financing and investing mechanisms should be market-based,interest rates and exchange rates should gradually become marketdetermined.
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