China launches a new fiscal stimulus plan to boost its economy!

China launches a new fiscal stimulus plan to boost its economy!
Nov 10, 2008 01:48
DREAMLIFE Points: Join Date: Sep 5, 2007 Status: offline	Yesterday, Chinese authorities announced a a “massive infrastructure spending programme”, a part of its new fiscal stimulus plan to boost slowing Chinese economy. In the next two years, about 4000 billion RMB will be spent on infrastructure and social welfare. This move shows that China has taken actions to cope with the global economic crisis. Before making this decision, China has cut the interest rates three times, scrapped quotas for bank lending and unveiled measures to help housebuyers and some exporters. However, the economists said that these were not enough. Some economists believe that the growth rate would go down to 6 percent next year if there was no fiscal stimulus. Last year, the growth was near 12 percent. By the way, Xinhua news reported that Value added Tax reform would be introduced and those Chinese companies will save 120 billion RMB from this.

Nov 10, 2008 01:48

DREAMLIFE
Points:
Join Date: Sep 5, 2007
Status: offline

Yesterday, Chinese authorities announced a a “massive infrastructure spending programme”, a part of its new fiscal stimulus plan to boost slowing Chinese economy. In the next two years, about 4000 billion RMB will be spent on infrastructure and social welfare.

This move shows that China has taken actions to cope with the global economic crisis. Before making this decision, China has cut the interest rates three times, scrapped quotas for bank lending and unveiled measures to help housebuyers and some exporters. However, the economists said that these were not enough. Some economists believe that the growth rate would go down to 6 percent next year if there was no fiscal stimulus. Last year, the growth was near 12 percent.

By the way, Xinhua news reported that Value added Tax reform would be introduced and those Chinese companies will save 120 billion RMB from this.

Nov 10, 2008 07:36	#1
WCTMAN Points: Join Date: Dec 17, 2005 Status: Offline	Not to be too picky on your post, but the actual stimulus plan is 586 Billion ( as per China Daily Nov 10 / 08 ). This is a big number. Even deducting a nominal value of 1% for graft and corruption means that 5.86 Billion ( that is 5, 860,000,000 ) will "disappear". Infrastructure sub - contractors are singing " Happy days are here again..."

Nov 10, 2008 13:32	#2
CARLOS Points: Join Date: Sep 10, 2007 Status: Offline	WCTMAN, to that simply can´t add anything. Carlos

Nov 10, 2008 18:56	#3
MARRIE Points: Join Date: Jan 7, 2008 Status: Offline	Well side WCTMAN, It's a wise stimulas plan, but how it will be implemented involves potential corruption considering it's a public project which requires strict governace and auditing to make sure the money goes to where it is supposed to go.

Nov 10, 2008 20:14	#4
DREAMLIFE Points: Join Date: Sep 5, 2007 Status: Offline	WCTMAN, you should have read my post carefully. I said "4000 billion RMB". It is 585.98 billion U.S. dollars.

Nov 11, 2008 00:48	#5
WCTMAN Points: Join Date: Dec 17, 2005 Status: Offline	You are right, Dreamlife. Maybe it is because big numbers boggle simple minds. Which, of course, makes the issue of graft and corruption even worse, at least in terms of the quantity of money that will be thrown around. Gawd, that is a lot of cash.

Nov 11, 2008 21:45	#6
COOLSPRINGS Points: Join Date: May 19, 2008 Status: Offline	The stimulas pkg lasts 3 year until 2010, covering rebuild of disaster area of SiChuan, romote area rail ways, affordable housing, it's a wise policy to stimulate china own unique hugh self-consumption market.

Nov 11, 2008 22:05	#7
YVONNE Points: Join Date: Nov 29, 2004 Status: Offline	It is a wise policy. WCTMAN, the graft and corruption problems are serious in China. But China is doing her job to deal with these problems. I have noticed that many corrupted have been arrested and sentenced in recent days. One of them is the mayor or vice mayor of Beijing municipality. Anti-corruption campaign has started. I am sure that more corrupted officials will be caught and sentenced.

Nov 11, 2008 23:51

DODGER
Points:
Join Date: Jul 15, 2007
Status: Offline

Yvonne, I can’t see this corruption being controlled in the short term as it’s not really considered to be that by the people that are involved. They think of it as more like commissions and every one has their rice bowl at the ready. It’s been going on for a thousand years.
My guess is that if they arrested every official and every business person involved the country would come to a grinding halt.
I also believe that the 1% figure quoted is a little under.
Dodger.

Nov 12, 2008 03:49	#9
KEVIN0518 Points: Join Date: Mar 13, 2007 Status: Offline	My guess is that if they arrested every official and every business person involved the country would come to a grinding halt. Yes, throughly sovled. But I am afraid that there are no enough prisons to accommodate them. China has adopted a policy as similar to Singapore, raising those public servants' wages. The public servants' salaries all have risen. However, the corruption still exists.

Post a Reply to: China launches a new fiscal stimulus plan to boost its economy!