Disadvantages:
1. Every time the economic growth rate of the United States drops 1%, China's exports to the United States will drop by 5% ~ 6%. Secondly, the subprime mortgage crisis further strengthened the weak position of the dollar, accelerated the depreciation of the dollar, and then reduced the advantages of export products.
The contradiction between the Fed's continuous interest rate cuts and the injection of liquidity into banks and China's tight monetary policy led to a large amount of hot money flowing into China, which accelerated the process of dollar depreciation and RMB appreciation, thus reducing the price advantage of China's export products and posing a challenge to American exports.
2. In the short term, the increase of China's domestic demand can't make up for the decrease of American economy's import demand for China. China's exports to the United States will decrease by 5% ~ 6% every time the economic growth rate of the United States decreases by 1%. Secondly, the subprime mortgage crisis further strengthened the weak position of the dollar, accelerated the depreciation of the dollar, and then reduced the advantages of export products.
3. The contradiction between the Fed system's continuous lowering of interest rates and injecting liquidity into banks and China's tight monetary policy has led to a large amount of hot money flowing into China, which has accelerated the process of depreciation of the US dollar and appreciation of the RMB, thus reducing the price advantage of China's export products and posing a challenge to US exports.
The financial turmoil is characterized by people's pessimistic expectation that the future will be based on the economy. The currency of the whole region has depreciated sharply, resulting in huge losses in economic aggregate and scale, which has hit economic growth. It is often accompanied by a large number of business failures, rising unemployment rate, general economic depression in society, and sometimes even social unrest or national political turmoil.
Financial crisis can be divided into currency crisis, debt crisis and banking crisis. In recent years, the financial crisis has increasingly presented some mixed forms of crisis. And it will gradually spread to neighboring cities and countries.
Extended data
Economic crisis has existed as early as in the production of simple commodities, which is related to currency as a means of circulation and payment. Only in the mode of production can the crisis become a reality. With the development of simple commodity economy-private labor and social labor, economic crisis is inevitable.
With the extensive development of social division of labor and commodity production, every enterprise has become a link in the complex system of socialized mass production. Objectively speaking, it serves the whole society, meets social needs and should be regulated by society. Because the means of production are private, production is subordinate to the interests of enterprises, and the production results are occupied by enterprises.
The sole purpose of enterprise production, that is, the expansion or contraction of production, does not depend on the relationship between production and social needs, that is, the needs of socially developed people, but on profit and the ratio of this profit to the capital used, that is, a certain level of profit rate.
Baidu Encyclopedia-Financial Crisis
Baidu encyclopedia-financial storm