Mon. Dec 5th, 2022

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China, known as the People’s Republic of China (PRC), is the world’s most populous country, with a population of around 1.4 billion in 2019. It covers approximately 9.6 million square kilometers (3.7 million mi2), it’s the world’s fourth-largest country by area.

In late 2009, China overtook Japan because the world’s second-largest economy and today, China’s GDP stands at a huge $14 trillion USD and growing.

China hit a humungous growth spurt within the 1990s and 2000s, because the nation posted ridiculous double-digit growth. This put its booming economy at the forefront of emerging market growth.

Interestingly, the expansion has been spurred on by the agriculture and industrial industries, which account for quite 60% of the entire GDP.

Export trade has also played a significant factor, with the undervalued yuan helping make Chinese goods more attractive in international markets.

The People’s Bank of China (PBoC), which is found in Beijing, is responsible of China’s monetary policies.
Aside from interest rates and reserve ratio requirements, the PBoC is additionally tasked with regulating financial institutions in China .

It is currently holding over $1.3 trillion USD worth of Treasury bills.

Recently, however, the PBoC decided to abandoning of this traditional practice and adopt the convention of hiking or cutting interest rates by 0.25% increments.

Aside from the rate of interest , the PBoC also has the power to regulate the reserve ratio requirement (RRR) for banks in its monetary policy arsenal.

The RRR refers to the quantity of money Chinese banks are required to carry in their vaults. By varying the ratio, the PBoC is in a position to regulate what proportion money is in circulation and keep inflation within its target levels.

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