China's Major Tax Problem: China's Land Handling

The video discusses the $11 trillion global mortgage-backed securities market and compares it to China's land lease issues. It highlights the challenges faced by the Chinese government with expiring land leases and public sentiment against reclaiming land. The video also explores China's taxation problems, where most citizens avoid taxes due to informal employment or business loopholes. This limited tax base restricts the government's economic control, especially during downturns, affecting fiscal policy effectiveness.

What is the main concern regarding the expiration of land leases in China?

• The land will be automatically renewed for free.

• The government will reclaim the land, displacing residents.

• The land will be sold to foreign investors.

• The leases will be extended with increased fees.

Why do many people in China not pay income taxes?

• The tax rates are too high.

• They receive tax credits for business activities.

• They work in the informal economy.

• They are exempt due to low income.

How does the Chinese government benefit from loose business tax regulations?

• It simplifies tax collection.

• It encourages business growth.

• It increases tax revenue.

• It reduces corruption.

What is a major challenge for the Chinese government in managing the economy?

• High levels of foreign debt.

• Rapid technological advancement.

• Limited control over the tax base.

• Excessive government spending.

Why is fiscal policy important in managing an economy?

• It ensures equal distribution of wealth.

• It helps control inflation and stimulate growth.

• It reduces the need for monetary policy.

• It increases government revenue.