There was one day.There was one day.There was one day.There was one day.Financial crisisFinancial crisisWhat s the financial crisis?What s the financial crisis?A financial crisis is a disruption to financial markets in which adverse selection and moral hazard problems become much worse, so that financial markets are unable to efficiently channel funds to those who have the most productive investment opportunities. As a result, a financial crisis can drive the economy away from an equilibrium with high output in which financial markets perform well to one in which output declines sharply.The type of financial crisisThe type of financial crisismonetary crisisdebt crisisbank crisisSpecific Specific phenomenonphenomenonAmericanThe American economic crisis is also called the subprime crisis. The relaxing regulations on the credit and the persistently increasing tendency in the real estate and stock resulted in the final collapse of economy. Thousands of people lost their jobs and the stores closed down in the Wall Street overnight. nThe economy continues to have a negative growth. And that the supply exceeds the demand causes thousands of waste of products( they even pour the milk into the sewer).nOf course, the Americas first place in the world economy was inescapably influenced. And in order to transfer the crisis to other countries,the America dollar was devalued. Obviously,America is just like a schemer,it successfully gets away from the crisis and leaves the world curing itself. Anyway, Americas economy is recovering from the economic shadow while the other countries are in slump.What is Americas fault?nThe U.S. is currently engulfed in the most severe financial crisis since the Great Depression. A key structural factor behind this crisis is the large demand for riskless assets from the rest of the world. Such demand not only triggered a sharp rise in the U.S. asset price, but also exposed the U.S. financial sector to a downturn by concentrating risk onto its balance sheet. While in emerging markets the concern with capital flows is in their speculative nature, in the U.S. the risk in capital inflows derives from the opposite concern: capital flows into the U.S. are mostly non-speculative and in search of safety. As a result, the U.S. sells riskless assets to foreigners, and in so doing, it raises the effective leverage of its financial institutions. ChinanThe economic crisis first happened in the littoral area of China and then affected the backland. At the beginning, the money devalued resulting in the inflation which mainly caused the crisis. Later many factories closed down and people were out of jobs. To a degree, the governments powerful regulation has successfully controlled the serious situation .nAs a matter of fact, our economic growth mainly depends on export. The worlds slump sharply affects our export. nWe are especially affected by the European countries and America.The consequences of financial crisisnEnterprise debt burdennToxic Bank AssetsnDebt crisisnCurrency oversupplynBusiness overweight in banksnIt is hard to macro- controlnIt is difficult for the government to collect taxesnInflation and bubble appear and economic fluctuation is increasingnThe rate of bankruptcy and merger is rising rapidly so that the stability of enterprises is lowering, it is negative to the stability of society and economic growth1Currency devaluation by a wide margin2The greatly decline of total economic output and economic volume3Economic depression with mass enterprise bankruptcy 4Sharp increase of unemployment rate 5 Even resulting In Social UnrestNew financial crisis New financial crisis New financial crisis New financial crisis Because of Subprime mortgage crisis ,in the next two years, developed country will make currency withdrawal for the stability of financial institutions. So there will be a new type of financial crisis. In this time, the biggest victims will be some emerging market countries that will also bring new opportunities and challenges to Chinas economy.How to overcome How to overcome the new crisis? the new crisis? For china the most effective way to survive in a financial crisis is to optimize our economic structure. In terms of former experience, only in this way can developing countries increase their economic income continuously.In any case, we should In any case, we should In any case, we should In any case, we should be confident with the be confident with the be confident with the be confident with the global economy.global economy.global economy.global economy.