4 - Countermeasures against bubble economies——Take China as an example

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All bubbles cannot escape bursting. At the moment, China has excessive asset expectations and an overextended supply of credit. Whether this bubble bursts consciously on its own, or unconsciously and suddenly and violently, will determine the fate of China's economy in terms of a hard landing. After analysis, I believe that the main countermeasures to prevent a bubble economy are.

(1) Establish a financial early warning system. In the face of huge unknown risks, a better countermeasure is to set up an early warning system to anticipate the occurrence of risks and prevent them early.

(2) Strengthen financial supervision and enhance international cooperation in financial supervision.

(3) Improve the use of monetary policy. In today's global recession, we need to increase monetary investment to boost China's economy through investment, but we also need to pay close attention to the timing and amount of monetary investment to prevent it from creating a new economic bubble or becoming an enabler of a bubble economy.

(4) Moderate diversification of foreign trade and financial ties. We need to promote moderate diversification of foreign trade and financial ties to properly diversify risks, and actively promote bilateralisation and diversification of currency settlements to reduce the risk of contagion from financial crises.

(5) Increase the transparency of policy information and guide residents' investment. Since China has a relatively obvious group behavior and huge resident savings, increasing the transparency of government policy information and actively guiding residents to invest is also an important step in our efforts to prevent a bubble economy.

Bubbles have to burst eventually, and the bursting of a bubble can in turn have a tragic impact on the economy. A wise move would be to allow the bursting of bubbles in bubble areas in a planned manner, while stimulating other sectors of the economy, thus maintaining a better overall economic development.

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