Which country has framed 'One Province, One policy' to handle financial risk?

Appeared in: MNS 2024

Explanation

China has adopted the 'One Province, One policy' to manage financial risks, particularly those arising from local government debt.
This approach allows for customized, region-specific plans, acknowledging that economic conditions and debt levels vary significantly across China's different provinces.
Under this framework, the central government requires each province to develop its own strategy to address hidden debts and ensure local financial stability.

Option A: India's financial risk management is centralized, not province-specific. Key decisions are made by the Reserve Bank of India (RBI) and the central government's Ministry of Finance.
Option C: The United States uses a federal system where regulatory bodies like the Federal Reserve (the Fed) and the Securities and Exchange Commission (SEC) oversee the financial system nationally, with additional regulations at the state level. It does not follow a 'province-policy' model.
Option D: The United Kingdom has a highly centralized financial regulatory structure. The Bank of England and the Financial Conduct Authority (FCA) are the primary bodies responsible for financial stability across the entire country.

Clinical Relevance

Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain International economic policies for financial risk management as background academic context rather than a clinical decision trigger.
Understanding the economic policies of major world economies like China is crucial for grasping global financial stability and international relations.
This policy illustrates a key governance challenge: balancing central control with local autonomy to manage complex issues like regional debt.
This knowledge is relevant for general awareness, which is a component of many competitive examinations.

How to Approach the Question

First, identify the key phrase in the question: 'One Province, One policy'.
Analyze the phrase: it implies a decentralized policy framework tailored to specific administrative divisions (provinces).
Consider the political and economic structures of the countries listed in the options.
Recall or deduce that China, as a large country with a strong provincial system under central guidance, often uses targeted, region-specific strategies for economic management.
Eliminate the other options by considering their financial systems: India (centralized), the USA (federal), and the UK (centralized) do not fit the 'One Province, One policy' description.

Concept Tested & Keywords

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