China's Fiscal Stimulus Policies in Response to GFC and COVID Crisis

Abstract

This paper focuses on discussion of China’s economic policy especially in response to Global Financial Crisis and COVID-19, with emphasis on infrastructure investment stimulus package policy as reference, analyzing the integration of economic theories with China’s accurate stimulus package during this counter-cyclical period. This may offer reference for other economies that are facing similar challenges. In 2020, China implemented a significant infrastructure stimulus policy aiming to boost economic growth and creating jobs amid outbreak of COVID-19 pandemic. This policy involves a number of measures including increased government spending on infrastructure projects and encouraging private investment in areas such as renewable energy and digital technology. The paper analyzes pros and cons of this policy including long term and short team impact to economic development. When the market economy develops for a certain period, it will always meet with the "Minsky moment", prosperity and bubbles will interact. We need to realize that stimulus package was a short-term remedy, we need make a good diagnosis of what the real reason that cause problem so that we can take those into our future economic policy choices to better navigate us amid various economic cycles.