Their western equivalents while recent developments

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their western equivalents. While recent developments, including rising consumer prices,struggling stock market, energy shortage, and a cooler housing market imply that the commercialbanks in China are unable to complacent about their potential housing market challenges andwider financial crisis (Pavlov & Wachter, 2008). Furthermore, in the housing market, the urbanproperties of China experienced a continued decline in 2009 compared to the previous years andindicated a rising trend on a monthly reporting.Impacts on the Economic performance of ChinaUS subprime mortgage promoted financial crisis thus reaching the economic performanceof China. This was reflected in numerous economic indicators, including trade, GDP, and current
IMPACT AND INSPIRATION OF US SUBPRIME MORTGAGE CRISIS ON CHINAaccount balances, interest rates, and inflation rates, measures of consumer confidence, taxrevenues, and government expenditures. Hatzius, (2008) reports that the impact of US subprimein China reflects the fall in GDP growth rate following the financial crisis inception. Essentially,the rate of economic growth in 2008 stood at 10.6 percent, that later dropped to 6.1 percent in2009 indicating a 4.6 percent lower in the previous year (Hatzius, 2008). Besides, Chinarecorded an annual growth of 5.1 percent growth in industrial output and further rose to 8.3percent indicating the bottoming out tat is characterizing the most recent financial crisis stage.Inflation rate measured using the Consumer Price Index (CPI), dropped by 1.2 percent in 2008.The CPI decrease in comparison to a 1.6 percent decline further promoting economic slowdown.Hatzius, (2008) hearsays that the China’s trade front based on exports were severely hit byintensified US subprime financial crisis. The manufacturing sector, in precise, experienced a fallin export by 17.5 percent in 2009 and fell to 25.7 percent in the last quarter of the year (Hatzius,2008). According to Hatzius, this recorded the worst performance in the history of China.Similarly, China’s imports decelerated and the positive trade balance of China throughout theentire year of 2008 totaled to approximately US$ 300 billion. The prior trade balances remainedin a considerable surplus despite the export deceleration, and the imports fell sharplyThe imbalance of US economy resulted in lower interest rates following the lastingeconomic development. The impacts of US subprime mortgage on cross-border capital flowsfeature stock investments. Hatzius, (2008) further finds that before the commencement of the USsubprime mortgage crisis, US was reported as the global most active investor in world stockmarkets. According to Hatzius, he investors in US held foreign stocks amounting to $5 trillion inthe trading period ending 2007. Foreign investors, on the other hand, held US stocks ofapproximately $3.1 trillion in the trading period ending June 2007. These results, Hatzius
IMPACT AND INSPIRATION OF US SUBPRIME MORTGAGE CRISIS ON CHINAindicates, the US was a global net investor in foreign stocks, irrespective of being the largest net

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