[Biweekly Symposium] No. 581: Monetary Policy, Production-Investment Structure and Local Financial Crisis in Wenzhou- An Austrian School Business Cycle Analysis.
Lecturer: YE Zhipeng
Host: QIN Sidao
Commentators: LIU Xiahui, ZHOU Hongming, ZHANG Lin
Dr. YE Zhipeng firstly stressed that there has never been a domestically generated financial crisis in China ever since the reform and opening-up. The Asian financial storm in 1997 and the global financial crisis in 2008 were not domestically borne, and China took a lesser hit in both. However, the regional financial crisis in Wenzhou that took place in September 2011 was one that hit China hard and revealed systematic flaws of China’s financial institution. By utilizing the Austrian School of business cycle, Dr. YE Zhipeng concluded that the regional financial crisis in Wenzhou was a byproduct of the stimuli package of RMB 4 trillion in the aftermath of the 2008 financial crisis; the yet-to-be-complete open financial institution of China led banks and corporates to conspire, which enlarged the financial risk; and the feature of the Wenzhou financing pattern bred the crisis.
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