As China’s Losses Mount, Confidence Turns to Fear

A global credit crisis has prompted consumers worldwide to slow spending, leading to shuttered factories in China. Leaders of China, like those throughout the world, worry that economic crisis could trigger political instability and demands for change. Growth in the domestic national product, whiles till approaching 10 percent, has been slow by Chinese standards. The government has acted promptly – cutting interest rate cuts in six weeks, offering new export tax rebates, lowering housing costs, investing billions on infrastructure and giving financial packages to displaced workers. “The government's efforts to prop up individual companies are a radical move for a country that in recent years has tried to move away from its ‘iron rice bowl’ philosophy, in which jobs and wages are guaranteed for life, and transition to a more sink-or-swim-style capitalism,” reports Ariana Eunjung Cha for the Washington Post. In democratic or communist societies, governments must respond to economic crises in ways viewed as fair and reasonable or else expect criticism and unrest. – YaleGlobal