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://www.reuters.com/article/us-iran-oil-exports/irans-crude-exports-slide-to-500000-bpdor-less-sources-idUSKCN1SN2G4 Sivramkrishna, S. (2016), China’s Macroeconomic Policy Options: A Sectoral Financial Balances Perspective, Studies in Business and Economics , 11(1), 152-163. Tasnim News Agency (2019), Eurasia review: Iran central bank chief says country has ample forex reserves , May 22, 2019, available at https://www.eurasiareview.com/22052019-iran-centralbank-chief-says-country-has-ample-forex-reserves/ Tehran Times (2019), U.S. sanctions Iran’s metals; what’s the Impact? May 11, 2019, available at https

Abstract

This paper attempts to discern the macroeconomic policy options open to China after its stock market crash in August 2015. While several facts and figures on different facets of the Chinese economy keep pouring in – high levels household savings, rising indebtedness of private sector, slowing GDP growth rates, contracting current account surplus, and many more – it is difficult to get a holistic picture of the Chinese macroeconomy and the policy options that it has in wake of the significant changes taking place. The Sectoral Financial Balances (SFB) model, which has its basis in a simple accounting identity, provides a simple, consistent and logical framework that can help us work through the fog and put these facts and figures in perspective. At the same it allows us to trace the movement of the economy through time and draw insights into the possible trajectory of the economy given trends in various macroeconomic parameters. From our analysis, can we say that China is heading towards a major crisis? And what could be the possible policy response of the Chinese government in averting such a crisis? These are important questions that need urgent answers.