Monetary Policy in China Essay Example | Topics and Well Written Essays - 1750 words

Monetary Policy in China - Essay Example The China's central bank, People's Bank of China reflects the decision-making body's concern and aim for the change in policy. The article's primary economic element is the lowering of the interest rate in the economy. This lowering of the benchmark interest rate has an effect on the country's monetary policy and money supply. According to Bradsher in the article, "effective Tuesday, the People's Bank of China lowered by 0.27 percent, to 7.2 percent, the regulated benchmark rate that commercial banks may charge for one-year loans to business borrowers with strong credit histories. Rates for shorter-term loans will be generally cut even more while rates for longer-term loans will be subject to smaller adjustments, the central bank said, without providing details (September 2008)." By lowering the interest rate, the central bank aims to signal to commercial banks to lower the lending rate. By lowering the lending rate, the country aims to make funds more accessible to business borrowers. In figure 1.1, China's benchmark rate is lowered. The interest rate aims to lower the money supply in the country. By lowering the money supply coupled with less stringent limits on lending, China's Politburo aims to "protect the country from the global economic downturn." By loweri... owering the money supply coupled with less stringent limits on lending, China's Politburo aims to "protect the country from the global economic downturn." By lowering the interest rate, China aims to signal commercial banks to lower down their lending rate which makes the cost of accessing financing lower. As is shown in figure 1.2 and 1.3, lowering the interest rates lower the costs to financing, which increases the investments in an economy. This increase in investments due to lower costs of financing that is brought by this change in monetary policy does not increase proportionately in the economy. Figure 1.4 shows the effect of the increase in investment in the economy. Because of the multiplier model, the increase in the investment is affected by a given multiplier in an economy; thus the economy rises so much more for every increase in the investment due to the lowering of interest rates as part of the monetary policy. Figure 1.5 shows the effect of the monetary policy on the aggregate demand of the economy. Due to the increase in investments, the aggregate demand curve shifts to the right which increases the gross domestic output in the economy. Conclusion The monetary policy that has been announced by China's Politburo and People's Bank of China includes lowering down the interest rates. By lowering the interest rates, the central bank signaled the commercial banks to lower down the interest rates that are charged to business borrowers. This change in monetary policy aims to lower down the cost of borrowing money which will provide more funds accessible; more available funds are aimed to be channeled down to business owners as less stringent limits on lending are enforced as part of the policy. By lowering the interest rates, the government aims to

Managing Organizational Change Essay Example | Topics and Well Written Essays - 750 words

Managing Organizational Change - Essay Example However, it is critical that an organization takes into account the effect of the organizational culture defining the organization whenever contemplating change because it greatly influences the performance of the organization through defining the organization’s goals and giving the organization direction. Analyzing an organization’s culture is critical whenever change is bound to be commenced because not all cultures embrace change and as such some are seen to be rigid therefore necessitating special care and attention. In the event that a culture is rigid to change, it is always necessary that the management devise ways to have the culture changed to embrace change. As earlier said, change to any organization is inevitable and as such, any inhibitor such as the organization culture would be needs to be addressed. Changing the rigidity of habits, norms, systems and believes in an organization would influence the entire culture hence influencing organizational change. R esistance to change Changing an organizations structure and administration enhances quality and service delivery. Since the change entails a wide range of rearrangement of the organization structure, proper preparation is essential. ... It emanates from the fears that are experienced by the employees concerning the outcome of the change. This is because change entails a wide range of rearrangement of the organization structure through which there is the possibility of job loss to some employees and also the reassignment to different job designations, which implies that there would be change in social relations. The reaction to an organizational change by employees goes through different phases among which is resistance as is experienced (Bovey and Hede, 2001, 372).The most efficient tool to address the resistance to change that is bound to be experienced in the process of organizational change is through proper communication. The management is obligated to have a clear communication strategy, which will inform the employees of the intended move, the reasons to the changes and the accompanying benefits to the employees in the event of the change. Through resistance assessment, it is usually clear that employees are u sually concerned about their job security in the event of change as well as their social relations. It is therefore necessary that the management employees effective communication tools whenever contemplating change to avoid the occurrence of such resistance to change. Vision Unlike a mission statement, which gives the statement of purpose of an organization, the vision statement is designed to offer directions to the course of any organization besides giving the perspectives to cooperate values embraced. It is instrumental in guiding an organization in a given span of time while at the same time upholding the organizational values such as integrity, openness, transparency and hard work among others. A