Effect of the 2008 financial crisis
The 2008 economic crisis has been the most serious crisis of the world economy sincethe Great Depression crisis in 1930.The 2008 financial crisis occurred when three foams asreal estate, financial markets and the stock market ruptured simultaneously in the big countries of the Western economies. Because these countries dominate the whole world economy, so once they get into a crisis, all countries would be implicated, including China (Bondt, 2010). Market bubble is the inevitable product of the free market economy. China’s internal reform and opening up to the world initially enter the free-market competition. Of course, it will inevitably have to accept the impact and the challenge of the market bubble and the financial crisis.
The 2008 economic crisis mainly has the following characteristics: First, it caused huge damage as it spread to the world's richest countries. As a result, there was a crash in the stock market and the process of recovery was very slow. Second, it was a wide range of impact, especially causing an extremely far-reaching impact to the major import and export trade countries which had a developed economy and technology. Third, it led to a serious damage to the global insurance companies and commercial banks. As known to all, the world's largest commercial banks emerged a huge loss, which induced the collapse of the real economy. Fourth, in order to save the national economy, the governments had to rescue market. And bailout funds like Britain and the U.S. was probably on account of 13 percent of its GDP (Shlens, 2009). The huge losses in the banking system were caused by the greed of the bankers, the government's macro-control ineffective, the failure to supervise banks, excessive loans and investment, and securitization of the asset.
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