Chapter TwoChapter Two Economy Economy 【2.1 The Economy of China】 【中国经济】2.1.1 Chinas Industrial Economy In terms of China, these two large shifts both occurred in the second half of the 20th century. Besides, because of the unique way of transforming to the market economy and its continuous and fast growth, China attracted more and more attention from international society. After the foundation of the Peoples Republic of China in 1949, Chinese industry got redevelopment from the ruins after war. Through several years period of economic restoration and transition, China started its own industrialized foundation gradually. Then in the continuous adjustment, Chinese industrial economy gradually transformed from planned system into market-oriented economic structure and China has developed from an underdeveloped industrial country into a modern one. 2.1.2 Chinas Agricultural Economy After the foundation of the Peoples Republic of China, on the basis of carrying out land system reform, applying new technology and adopting new product organizational form, Chinese agricultural development got great progress. Before the foundation of the Peoples Republic of China, Chinese grain production could not meet the basic needs of the whole peoples food and clothing. But now, it not only can meet the need of peoples food and clothing completely, but also meet the need in the deep processing of most agricultural products and the feed of them. Besides, there are also some left to be used to export. Since the foundation of the Peoples Republic of China, Chinese agriculture has experienced several periods and each period has its own features. Generally speaking, it can be divided into the following six stages: 2.1.3 Chinas Foreign Trade In the nearly thirty years since the foundation of New China to the period before reform and opening up, China had carried out the development policy of “being independent and self-reliant”. The policy “to catch up and surpass” was carried out and the highly power-centralized and mandatory planning economic system was practiced taking the realization of industrialization in economic development in order to get rid of the situation of poverty and backwardness. Chinas economic reform from the end of the 1970s to the beginning of the 1980s had brought Chinas foreign trade into an important turning period. The Third Plenary Congress of the Eleventh Central Committee of the Chinese Communist Party in 1978 pointed out clearly that “China should develop its economic coordination with the other countries in the world on the condition of equality and mutual benefit and try its best to make use of the world advanced technology and equipments on the base of self-reliance.” 2.1.4 Chinas Fiscal Expenditure After the completion of socialist transformation, the Chinese Government focuses its attention on economic development. From the first five-year plan to 1985, the expenditure on economic development accounted for a large number to the financial expenditure, close to 60%. With the changes in the economic system, economic management functions gradually weaken down, while the functions of social management increase. And at the same time, the structure of financial expenditure has also changed a lot. From the changes in the structure of fiscal expenditure, we can see the changes in Chinese government function have experienced three stages in general: during the years immediately after 1949, the focus was on the security functions; from 1953 to the reform and opening up, its main function was economic construction; with the reform and opening up the function of social management is becoming increasingly important.2.1.5 Chinas Tax SystemI.History of the Chinese Tax Reform Tax reform in 1958: At that time, the socialist transformation was basically completed. Tax category and tax rate were adjusted according to the principle of “simplifying tax system on the basis of the original tax burden”. The primary coverage included: the mergence of tax categories, simplification of tax links, and lowering the tax rate of specific products. There were 11 tax categories after the adjustment. Tax reform in 1973: As a result of special political and economic environment, the reform emphasized simplification in unilateralism, and the nature of combined taxes was vague. They were the products of idea of the “Great Cultural Revolution”. Regulation of tax revenue to economy after the tax reform is close to zero.2.1.5 Chinas Tax SystemI.History of the Chinese Tax Reform Tax reform from 1979 to 1993: It consisted of two steps: “tax payments instead of profit deliveries to the state” and the 1984 business and tax overall reform. Chinese tax system developed from single tax system to multiple tax system which was comprehensive, multi-link and multi-level. Thus it basically adapted to the multiple economic forms, distribution channels and management ways at that time. Tax reform in 1994: It has been the largest scale, most widely used, and most powerful tax reform ever since the founding of new China. It reforms personal income tax, circulation tax and enterprise income tax and so on, and merges and begins to impose some local taxes. Taxation structure tends to be reasonable and adaptive for the socialist market economy.2.1.5 Chinas Tax SystemII. Changes in Chinese Taxation Structure In Chinese tax revenue, the commodity taxation has been in the dominant position. With economic development, tax reform and macroeconomic fluctuations, the proportion of commodity taxation is bumpy. The status of income taxation has been increasingly important, and the revenue-of personal income tax has largely increased; the revenue of enterprise income tax is also rising. Changes in taxation structure in China have some obvious stage characteristics.2.1.5 Chinas Tax SystemIII. Current Tax System in China There are six classes in Chinese current tax system, namely class of commodity tax, class of income tax, class of property, class of resource tax, class of tax on behavior and class of agricultural tax, a total of 24 tax categories. Among them, twenty-two tax categories are levied by the tax authorities. They are: value-added tax, consumption tax, business tax, enterprise income tax, and income tax of enterprises with foreign investment and foreign enterprises, personal income tax, property tax, urban real estate tax, deed tax, and resource tax, tax on using urban land, urban construction tax, land value-added tax, vehicle purchase tax, and tax on arable land occupation, entertainment tax, fixed assets investment orientation regulation tax (temporarily stopped levy), vehicle and vessel tax, stamp duty, slaughter tax, and agricultural tax.2.1.6 China Stock China stock began in the middle of 1980s. In November, 1984, the first company that issued stocks appeared, that was Shanghai Feiyue Sound Limited Company. In September, 1986, Jingan Office of Shanghai Trust and Investment Corporation of Chinas Industrial and Commercial Bank opened publicly to sell stocks, which symbolized the beginning of the stock trade in New China. In July, 1988, the first professional joint-stock company was founded- Shanghai Wanguo Stock Company. The basic facilities of the market have been improved on, law and rules have been perfected gradually, and standardization of the market has been developed. In general, it has become one important component of the socialist market economic system, and has made its great contribution to the restoration and development of business and financial market, to optimize the arrangement of resources, the adjusting of economic structure and economic development.2.1.6 China Stock Since the foundation of Shanghai Stock Trade Market in the end of 1990, China stock had developed at high speed and experienced the process with only over ten years which the advanced national markets had experienced several decades or even one hundred years. The stock market improves with an anniversary average of 50% and its speed of expansion is much higher than any other industries. The development of China stock can be roughly divided into five stages【2.2 The Economy of the United States】 【美国经济】2.2.1 Manufacturing of the nited States The strong economy of the 1990s produced record profits for many American manufacturing firms. Sales of manufactured goods totaled $354.9 billion in 1999. One result of this has been increased investment in new factories and equipment and in research and development of new products. Profits in industry have also been aided by the increased productivity of workers. New investment by industry increased by 9 percent since 1995. The history of the US industry has been marked by the introduction of increasingly sophisticated technology in the manufacturing process. Advances in chemistry and electronics have revolutionized many industries through new products and methods. Examples include the impact of plastics on petrochemicals, the use of lasers and electronic sensors as measuring and controlling devices, and the application of microprocessors to computing machines, home entertainment products, and a variety of other industries. 2.2.2 Agriculture of the United States The American farmer has generally been quite successful at producing food. Indeed, sometimes his success has created his biggest problem: the agricultural sector has suffered periodic bouts of overproduction that have depressed prices. For long periods, government helped smooth out the worst of these episodes. But in recent years, such assistance has declined, reflecting governments desire to cut its own spending, as well as the farm sectors reduced political influence. Farmers have not repealed some of the fundamental laws of nature, however. They still must contend with forces beyond their controlmost notably the weather. Despite its generally benign weather, North America also experiences frequent floods and droughts. Changes in the weather give agriculture its own economic cycles, often unrelated to the general economy.2.2.3 The Foreign Trade and Global Economic Policies of the United States U.S. foreign trade and global economic policies have changed direction dramatically during the more than two centuries that the United States has been a country. In the early days of the nations history, government and business mostly concentrated on developing the domestic economy irrespective of what went on abroad. But since the Great Depression of the 1930s and World War II, the country generally has sought to reduce trade barriers and coordinate the world economic system. This commitment to free trade has both economic and political roots; The United States dominated many export markets for much of the postwar perioda result of its inherent economic strengths, the fact that its industrial machine was untouched by war, and American advances in technology and manufacturing techniques. By the 1970s, though, the gap between the United States and other countries export competitiveness was narrowing. 2.2.3 The Foreign Trade and Global Economic Policies of the United States Whats more, oil price shocks, worldwide recession, and increases in the foreign exchange value of the dollar all combined during the 1970s to hurt the U.S. trade balance. U.S. trade deficits grew larger still in the 1980s and 1990s as the American appetite for foreign goods consistently outstripped demand for American goods in other countries. This reflected both the tendency of Americans to consume more and save less than people in Europe and Japan and the fact that the American economy was growing much faster during this period than Europe or economically troubled Japan. The United States believes in a system of open trade subject to the rule of law. Since World War II, American presidents have argued that engagement in world trade offers American producers access to large foreign markets and gives American consumers a wider choice of products to buy. More recently, Americas leaders have noted that competition from foreign producers also helps keep prices down for numerous goods, thereby reducing pressures from inflation.2.2.3 The Foreign Trade and Global Economic Policies of the United States The United States also frequently urges foreign countries to deregulate their industries and to take steps to ensure that remaining regulations are transparent, do not discriminate against foreign companies, and are consistent with international practices. American interest in deregulation arises in part out of concern that some countries may use regulation as an indirect tool to keep exports from entering their markets.2.2.4 The Capital Markets of the United States Capital markets in the United States provide the lifeblood of capitalism. Companies turn to them to raise funds needed to finance the building of factories, office buildings, airplanes, trains, ships, telephone lines, and other assets; to conduct research and development; and to support a host of other essential corporate activities. Much of the money comes from such major institutions as pension funds, insurance companies, banks, foundations, and colleges and universities. Increasingly, it comes from individuals as well. More than 40 percent of U.S. families owned common stock in the mid-1990s. There are thousands of stocks, but shares of the largest, best-known, and most actively traded corporations generally are listed on the New York Stock Exchange (NYSE). The exchange dates its origin back to 1792, when a group of stockbrokers gathered under a buttonwood tree on Wall Street in New York City to make some rules to govern stock buying and selling.2.2.4 The Capital Markets of the United States By the late 1990s, the NYSE listed some 3,600 different stocks. The exchange has 1,366 members, or “seats”, which are bought by brokerage houses at hefty prices and are used for buying and selling stocks for the public. Information travels electronically between brokerage offices and the exchange, which requires 200 miles (320 kilometers) of fiber-optic cable and 8,000 phone connections to handle quotes and orders. The smaller American Stock Exchange, which lists numerous energy industry-related stocks, operates in much the same way and is located in the same Wall Street area as the New York Exchange. Other large U.S. cities host smaller, regional stock exchanges.2.2.4 The Capital Markets of the United States The largest number of different stocks and bonds are traded on the National Association of Securities Dealers Automated Quotation system, or Nasdaq. This so-called over-the-counter exchange, which handles trading in about 5,240 stocks, is not located in any one place. Rather, it is an electronic communications network of stock and bond dealers. The National Association of Securities Dealers, which oversees the over-the-counter market, has the power to expel companies or dealers that it determines are dishonest or insolvent. Because many of the stocks traded in this market are from smaller and less stable companies, the Nasdaq is considered a riskier market than either of the major stock exchanges. But it offers many opportunities for investors. By the 1990s, many of the fastest growing high-technology stocks were traded on the Nasdaq.2.2.5 The Monetary and Fiscal Policy of the United States Much of the history of economic policy in the United States since the Great Depression of the 1930s has involved a continuing effort by the government to find a mix of fiscal and monetary policies that will allow sustained growth and stable prices. That is no easy task, and there have been notable failures along the way.2.2.5 The Monetary and Fiscal Policy of the United StatesI.Fiscal PolicyBudget and Taxes The growth of government since the 1930s has been accompanied by steady increases in government spending. In 1930, the federal government accounted for just 3.3 percent of the nations gross domestic product, or total output of goods and services excluding imports and exports. That figure rose to almost 44 percent of GDP in 1944, at the height of World War II, before falling back to 11.6 percent in 1948. But government spending generally rose as a share of GDP in subsequent years, reaching almost 24 percent in 1983 before falling back somewhat. In 1999 it stood at about 21 percent.2.2.5 The Monetary and Fiscal Policy of the United States The development of fiscal policy is an elaborate process. Each year, the president proposes a budget, or spending plan, to Congress. Lawmakers consider the presidents proposals in several steps. First, they decide on the overall level of spending and taxes. Next, they divide that overall figure into separate categoriesfor national defense, health and human services, and transportation, for instance. Finally, Congress considers individual appropriations bills spelling out exactly how the money in each category will be spent. The federal income tax is levied on the worldwide income of U.S. citizens and resident aliens and on certain U.S. income of non-residents. The first U.S. income tax law was enacted in 1862 to support the Civil War. The 1862 tax law also established the Office of the Commissioner of Internal Revenue to collect taxes and enforce tax laws either by seizing the property and income of non-payers or through prosecution. The commissioners powers and authority remain much the same today.2.2.5 The Monetary and Fiscal Policy of the United States Over the years, lawmakers have carved out various exemptions and deductions from the income tax to encourage specific kinds of economic activity. Most notably, taxpayers are allowed to subtract from their taxable income any interest they must pay on loans used to buy homes. Similarly, the government allows lower- and middle-income taxpayers to shelter from taxation certain amounts of money that they save in special Individual Retirement Accounts (IRAs) to meet their retirement expenses and to pay for their childrens college education.2.2.5 The Monetary and Fiscal Policy of the United StatesII. Money in the U.S. Economy The Federal Reserve has three main tools for maintaining control over the supply of money and credit in the economy. The most important is known as open market operations, or the buying and selling of government securities. To increase the supply of money, the Federal Reserve buys government securities from banks, other businesses, or individuals, paying for them with a check (a new source of money that it prints); when the Feds checks are deposited in banks, they create new reservesa portion of which banks can lend or invest, thereby increasing the amount of money in circulation. On the other hand, if the Fed wishes to reduce the money supply, it sells government securities to banks, collecting reserves from them. Because they have lower reserves, banks must reduce their lending, and the money supply drops accordingly.2.2.5 The Monetary and Fiscal Policy of the United States The Fed also can control the money supply by specifying what reserves deposit-taking institutions must set aside either as currency in their vaults or as deposits at their regional Reserve Banks. Raising reserve requirements forces banks to withhold a larger portion of their funds, thereby reducing the money supply, while lowering requirements works the opposite way to increase the money supply. Banks often lend each other money over night to meet their reserve requirements. The rate on such loans, known as the “federal funds rate”, is a key gauge of how “tight” or “loose” monetary policy is at a given moment. The Feds third tool is the discount rate, or the interest rate that commercial banks pay to borrow funds from Reserve Banks. By raising or lowering the discount rate, the Fed can promote or discourage borrowing and thus alter the amount of revenue available to banks for making loans.【2.3 The Economy of the United Kingdom】 【英国经济】2.3.1 The Industry of the United Kingdom British industry is a combination of publicly- and privately-owned companies. Since the 1980s, successive governments have worked to privatize most state-owned industries, but concerns over unemployment and public opposition to further privatization has slowed future plans. Examples of industries that remain owned by the government include railways, ship building, and some steel companies. Major segments of British industry include energy, mining, manufacturing, and construction. One of the strongest components of the British economy is the energy sector. The United Kingdom is a net exporter of energy. In addition to oil, the kingdom has abundant reserves of natural gas, coal, and atomic power. Most of the kingdoms energy resources are concentrated in the North Sea. Currently there are more than 100 active oil and natural gas fields. In addition to the British companies operating in the area, there are a number of international firms, including Texaco, Philips Petroleum, and Chevron. The main energy resource is oil. 2.3.2 The Agriculture of the United Kingdom British agriculture is highly mechanized and productive. It is among the most efficient in Europe. With only 2 percent of the workforce, British agriculture and fishing provides 60 percent of the kingdoms food needs. In 1999, there were 500,000 tractors in use in the United Kingdom, 157,000 milking machines, and 47,000 harvesters. Large-scale agriculture is concentrated in the fertile soils of the southeast region of England. Diseases such as hoof and mouth disease and mad cow disease have led to declines in the livestock sector. In 1999, production in the sector declined by 3.78 percent. Concerns over the potential spread of these diseases have led to broad bans on the importation of British beef and veal by a variety of nations, including the EU countries and the United States.2.3.3 The Foreign Trade of the United Kingdom The United Kingdoms economy is dependent on foreign trade. The government supports free and unrestricted trade and has championed international trade organizations such as the World Trade Organization and the EU. Because of its dependency on trade, the British have few restrictions on foreign trade and investment. The strength of the British pound and the state of the economy have made the United Kingdom an attractive investment area for foreign investors. The kingdom is the worlds second-largest destination for investment. About 30 percent of all foreign investment going into the EU is directed at the United Kingdom. The British also invest heavily in other nations.2.3.3 The Foreign Trade of the United Kingdom For several decades, the United Kingdom has had a trade deficit, as it has imported more goods and services than it has exported. In 1998, the trade deficit amounted to US$35 billion or 1.5 percent of GDP. However, because of the attractiveness of the kingdom to foreign investors, new investment capital continues to allow the British to fund this deficit because the new investment monies exceed the money the kingdom loses through its trade deficit. In order to attract foreign businesses and foreign investment, the British government has adopted a variety of programs. For instance, the Parliament allows local and regional governments to establish enterprise zones. In these zones, companies receive exemptions from property taxes and reimbursement for costs involved in the construction of new factories or business locations. These inducements may be extended for up to 10 years. 2.3.4 The Currency of the United Kingdom London is the world capital for foreign exchange trading. The highest daily volume, counted in trillions of dollars US, is reached when New York enters the trade. The currency of the UK is the pound sterling, represented by the symbol . The Bank of England is the central bank, responsible for issuing currency. Banks in Scotland and Northern Ireland retain the right to issue their own notes, subject to retaining enough Bank of England notes in reserve to cover the issue. Pound sterling is also used as a reserve currency by other governments and institutions, and is the third-largest after the U.S. dollar and the euro.2.3.4 The Currency of the United Kingdom London is one of the worlds leading financial centers. The London Stock Exchange is the nations largest stock exchange. In 1999, there were 1,945 companies listed on British stock markets. Total stock value in 1999 was US$2.93 trillion. While the British market is generally free and open, there are restrictions on foreign stock ownership of companies that the government still partially owns. In the case of state-owned companies, foreign ownership is limited to 49 percent of stock.【2.4 The Economy of France】 【法国经济】2.4.1 The Manufacturing of France About 19.3 percent of the GDP was generated by manufacturing in France in 1999, compared to 17.8 percent in the United States and 18.5 percent in Britain. Manufacturing contributes roughly 20 percent of the GDP in Italy, Germany and Japan. Investment in the industrial manufacturing sector was 141 billion francs in 1999. (These figures excluded the energy and agricultural manufacturing sectors.) Firms operating in the industrial manufacturing sector produced a variety of goods such as consumption goods, items related to the auto industry, and equipment such as electronics, machinery, and intermediate goods. The well-established name for French products in the fashion world helps France in the export of perfumes and even flowers. The consumption goods industry made nearly 200 billion francs from sales abroad in 1999. The contribution of the auto industry to the French exports figures in 1999 was almost 300 billion francs. France is one of the largest producers of passenger cars and commercial vehicles in the world, along with Japan, the United States, and Germany.2.4.1 The Manufacturing of France One other field where French companies are strong is construction and civil engineering. However, a recent declining trend in enrollment in science classes in the country is a major concern of education authorities. France is the second ranked producer and the leading exporter of agri-foodstuffs (processed food such as wine, cheese, and pasta) in Europe. It is the fourth-largest exporter in the world in chemicals, rubber, and plastics; and third ranked in pharmachemicals and pharmaceuticals.2.4.2 The Agriculture of France France has been one of the most dominant agricultural centers of Europe for centuries. That gave France an important role in Europe and, to some extent the world, affairs in the pre-industrial age. Currently, France still leads Europe in agriculture, excluding the Russian Federation. With about 730,000 farms, approximately 7 percent of the workforce is employed in agriculture or similar sectors such as fishing or forestry. When all people engaged in agriculture-related activities (including the processing of agricultural goods, for example) are considered, the percentage of the population engaged in agricultural production is much larger. As of 2001, many younger people tend to look for employment outside of family farms and help out only as part-timers. This trend, however, has generated an opportunity for others looking for jobs in agriculture. According to the French Ministry of Agriculture, the share of population actively involved in farming is decreasing.2.4.2 The Agriculture of France Nevertheless, new creative methods of marketing and agritourism have attracted some young talent to the sector. The sheer size of the land used for farming, about three-fifths of the total, indicates the place of agriculture in the lives of French people. In the post-World War II era, government has made a significant effort to modernize French agricultural production by switching to more scientific methods and modern equipment. In 1997, about 86 percent of farms owned at least 1 tractor, and farmers increasingly upgrade equipment. The size of irrigated land in 1997 is twice that in 1979.2.4.2 The Agriculture of France Fishing does not contribute to the French economy in comparison with the agriculture on the national scale. According to the data released by the Ministry of Agriculture, fish production in 1998 reached nearly 600,000 metric tons, a slight increase of 1.5 percent over the previous year. The biggest export items among agricultural products are various types of beverages and alcoholic drinks. According to the Ministrys numbers, the value of alcoholic exports reached 56.6 billion francs in 1999.2.4.3 The Foreign Trade of France Of over 2 million companies located in France, less than 5 percent take part in activities directly related to export, according to the Department of Foreign Trade of France. While mostly French-owned, some of these companies are multinational corporations. Companies such as IBM, Michelin, Hewlett Packard, and Daimler Benz are among Frances top 20 exporters, with the top 3 exporters being PSA, Renault, and Airbus Industrie. The top 20 companies export mainly vehicles and such items as tires, aircraft, electricity, office products, plastic goods, industrial equipment, food items, computer products, pharmaceuticals, and chemical goods. France is the second-largest trading nation in Europe (after Germany). Its foreign trade balance for goods had been in surplus from 1992 until 2001, reaching $25.4 billion (25.4 G$) in 1998; however, the French balance of trade was hit by the economic downturn, and went into the red in 2000, reaching a US$15bn deficit in 2003. Total trade for 1998 amounted to $730 billion, or 50% of GDPimports plus exports of goods and services. Trade with European Union countries accounts for 60% of French trade.2.4.4 The Banking and Securities of France The Banque de France, founded in 1800, came completely under government control in 1945. It is the bank of issue, sets discount rates and maximum discounts for each bank, regulates public and private finance, and is the Treasury depository. In 1945, a provisional government headed by Gen. de Gaulle also nationalized Frances four largest commercial banks, and the state thus came to control 55% of all deposits. The four banks were Crdit Lyonnais, the Socit Gnrale, the Banque Nationale pour le Commerce et IIndustrie, and the Comptoir National dEscompte de Paris. In 1966, the Banque Nationale and the Comptoir merged and formed the Banque Nationale de Paris (BNP).【2.5 The Economy of Germany】 【德国经济】2.5.1 The Industry of Germany The single most successful German industry is mechanical engineering. Unlike many industries in Germany and elsewhere, it is dominated by small rather than large companies. It includes over 4,000 firms throughout Germany. Only 3 percent of the companies have more than 1,000 employees. German mechanical engineering has a range of more than 17,000 products. Almost two-thirds of the products are exported. The best-known industry and the second-largest is automotive anufacturing. Such companies as Daimler-Benz, Volkswagen, and Bayerische otorenwerke (BMW) are known throughout the world. Almost half of all German-produced automobiles are exported, mainly to other EU members and to North America. Electrical engineering ranks third in importance among German industries. The biggest single firm is Siemens, although Bosch also ranks among Germanys largest companies. Products range from giant electric generating turbines exported all over the world to smaller electric engines and some consumer goods.2.5.2 The Agriculture of Germany Agriculture is a small sector of the German economy. It has declined in importance all during the twentieth century. However, despite the sectors small size, it remains politically important. Since unification, about three-quarters of the collectives have remained as cooperatives, partnerships, or joint-stock companies. The others were returned to their original ownersif those owners could be foundor were privately sold, becoming about 14,000 private farms. In western Germany and in the newly privatized farms in eastern Germany, family farms predominate. For the 630,000 farms, there are 750,000 full-time employees. There are also, however, many more part-time employees, and most farms do not represent their owners full-time occupation.2.5.2 The Agriculture of Germany Agricultural products vary from region to region. In the flat terrain of northern Germany and especially in the eastern portions, cereals and sugar beets are grown. Elsewhere, with the terrain more hilly and even mountainous, farmers produce vegetables, milk, pork, or beef. Almost all large cities are surrounded by fruit orchards and vegetable farms. Most river valleys in southern and western Germany, especially along the Rhine and the Main, have vineyards. Beer is produced mainly, but not exclusively, in Bavaria.2.5.3 The Banking System of Germany The German economy is a bank economy, with the main role in finance and credit being played by commercial and savings banks while other forms of credit are secondary. Banks provide most of the countrys investment capital because of the high German savings rate and because most Germans prefer to put those savings into banks rather than into stocks or bonds. As with many other German economic phenomena, this bank role is not new. Banks have played a central role in German financial and economic history since the Middle Ages. German banks function as universal banks, able to offer a full range of banking, saving, foreign exchange, and investment services to their depositors and clients. They hold funds or other assets, broker securities, underwrite equity issues, give advice on asset placement, manage accounts, and so on. About one-quarter of German banks are commercial. Most of the remainder are savings banks, mainly owned locally or regionally and operating under public statutes, or cooperatives that perform such specialized services as agricultural, crafts, or mortgage lending.2.5.3 The Banking System of Germany The three best known and most important German universal banksthe Deutsche Bank, the Dresdner Bank, and the Commerzbankare omnipresent throughout unified Germany and have immense influence. These banks opened hundreds of new offices in the east during unification and sent large staffs of bankers to manage offices and to train permanent personnel there. In effect, they were the principal agents for control of Germanys economic unification.本章参考文献及内容出处：1.田华实，徐静良. 用英语说中国经济. 上海：上海科学普及出版社，2009.2.en.wikipedia.org/wiki/Economy_of_the_United_States3.usa.usembassy.de/etexts/oecon U.S. Economy from USINFO.STATE.GOV4.en.wikipedia.org/wiki/Economy_of_the_United_Kingdom5.www.nationsencyclopedia.com/economies/Europe/United-Kingdom.html6.en.wikipedia.org/wiki/Economy_of_France7.www.nationsencyclopedia.com/economies/Europe/France.html8.en.wikipedia.org/wiki/Economy_of_Germany9.countrystudies.us/germany10.en.wikipedia.org/wiki/Economy_of_Japan11.www.mapsofworld.com/japan12.www.nationsencyclopedia.com/Asia-and-Oceania/Japan-FOREIGN-TRADE.html13.http:/www.nationsencyclopedia.com/economies/Americas/United-States-of- America.html