Essay on Eliminating Poverty and Controlling Pollution: Fiscal Spending Objectives

Objectives guiding policymakers in fiscal spending include and not limited to the elimination of extreme poverty by 2020. However, research indicates that a large number of close to 30 million within the villages are living with poverty. Secondly, the government was determined to put more funds into activities advocating for antipollution efforts. Such efforts were aimed to be directed in efforts controlling air, soil, and water pollution. Third, more investment needs to be done on the construction of infrastructures. The aim was to see an enhanced economy, although this was discarded years later after experts explained the challenges that will come along with more investments and huge debts. The critical contributor towards achieving these three objectives is how much the government is willing to allocate as resources. Any resource allocation should be made on a short term basis.

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Deleveraging may contribute negatively to large scale corporate defaults due to the large unsustainable debts. Despite China contributing to the GDP of the country, it will affect the economy later, causing an imbalance. According to a report by the Organization for Economic Cooperation and Development, the corporate debt read at 155 % of GDP in 2018. This is a higher indication showing chances of unsustainability. Secondly, deleveraging will lead to misallocation of funds, especially after the investment is made on local projects. Misallocation of those funds leads to a weaker economy and growth. Secondly, it will be hard for China to transform savings into an investment because this will lead to many more debts. This is because debts dominate the economy. To solve this crisis, China should focus on enhancing domestic spending and minimize savings. Again, many black markets were experienced, as many wanted to make a profit. Shockingly, government officials are at the forefront. Positively, this just led to massive job creation.

Industrial policy push contributed negatively to the market-oriented reforms where it undermined the export model of china. After incorporating other countries such as Europe, individuals no longer wanted to buy products from China, and they shifted to Europe. The industrialization push brought in employment and a short term benefit where the country could no longer hold the outcomes. It created more obstacles by ordering the banks to finance the projects, something that up to date they have not been compensated. Investors were discouraged from investing in China's economy, having in mind the occurrence with "shadow banks" that were granted loans. It is not clear whether an investor will make any profit, or they are exposing themselves to risk.

Conclusion

China had to know how to deal with various challenges that affected the state for them to qualify for the growth miracle. One environmental problem is highly evident in china. However, to deal with this, the state stipulated ways to deal with excessive energy consumption. Secondly, the state stipulated how it will enforce environmental conserving methods such as the use of natural gas, among others. Secondly, China had to deal with the demographic challenges where then, they had cheap labor from the people. The flow of labor was excellent and reasonable, considering the individuals were not highly educated; thus, they demanded less. However, the case is different, currently considering that the county has been experiencing low birth rates.