China & East Asia's Economies: Checkpoint 1

Quick checkpoint - five questions on hukou, special economic zones, state firms, property and the Belt and Road.

Question 1 of 5 What does China's hukou system do?

Sets exchange rates Registers people to a place and ties access to public services to it Controls the stock market Sets tariffs on imports

Many migrant workers without urban hukou have struggled to access city schools and benefits.

Question 2 of 5 Why did China create special economic zones in 1980?

To ban foreign investment To test market reforms and attract foreign investment in limited areas To end all trade To build military bases

Successful reforms in zones like Shenzhen spread to the rest of the country.

Question 3 of 5 What is a soft budget constraint?

When a firm can rely on government support or cheap loans, reducing pressure to be efficient A strict limit on spending A type of tax A central bank policy

This helps explain why state-owned firms are often less productive.

Question 4 of 5 What triggered defaults among Chinese property developers from 2021?

New limits on developers' debt known as the three red lines A ban on buying homes The end of urbanisation A currency peg

Highly indebted developers such as Evergrande could no longer borrow freely.

Question 5 of 5 When was the Belt and Road Initiative announced?

1978 2013 2001 2022

It finances infrastructure in over 140 countries.

← Back to Why China Saves So Much Next lesson → South Korea's Chaebol

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