View the step-by-step solution to: In China, many people are removing their money from the state

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In China, many people are removing their money from the state banks and lending it out themselves. The interest rate earned in a state bank account is about one-half the rate of inflation. On the other hand, loaning money to friends, relatives and, even unrelated entrepreneurs can often earn the investor double or more over the inflation rate. The gray market, an underground network of investors and private businesses, moves the cash from lenders to businesses. Judge whether marketing occurred in this situation and justify your conclusions. Appraise the effectiveness of government regulation in controlling markets.
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China has favoured FDI through joint venture route because they wanted all the industries
and strategies to be tightly regulated under government supervision. This can only be done if

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