Exploring the Causes of the U.S. Subprime Mortgage Crisis and Its Impact on China’s Economy

Abstract

The U.S. subprime mortgage crisis was a global financial turmoil triggered by excessive financial innovation, regulatory deficiencies, and lowered lending standards. This crisis inflicted severe damage on the U.S. economy and had profound implications for the global economy. As a significant trade partner of the U.S., China’s economy experienced substantial impacts during this crisis. The outbreak of the U.S. subprime crisis directly slowed down the U.S. economy and decreased purchasing power. As the primary destination for Chinese exports, the shrinking demand in the U.S. market severely impacted China’s export business. Numerous export-dependent enterprises faced difficulties, economic growth was curtailed, unemployment rates rose, and China’s economic stability faced immense challenges. In response to the crisis, the Chinese government implemented a series of effective measures, gradually stabilizing market expectations and enhancing the economy’s resistance to risks. Moving forward, China will continue to deepen reforms and promote high-quality economic development, contributing even more to global economic growth.