Homework #2 Kaibo Zhang
China aims to boost consumption
China’s economic policymakers meet towards the end of every year to establish a broad agenda for the coming 12 months. Chinese government launched a fiscal stimulus package a month ago, which was more like a statement of intent than a battle plan. Officials want public to know ‘they are taking actions’. The initial announcement of the fiscal stimulus was rushed out, officials have acknowledged, because growth in the economy was slowing rapidly. And since the first announcement, the economy appears to have deteriorated further, including a drop in car sales and electricity production in November. In addition, exports had decreases for the first time in nearly a decade. There is also the other main criticisms about the fiscal stimulus plan is it focuses too heavily on ...view middle of the document...
From government report, which shows that Chinese, exports declined 2.2 percent from a year earlier. Imports also fell 17.9 percent from a year earlier. Chinese government always wants to boost present and future the economy. This phenomenon shocked economists. The figures were far below forecasts, even in the light of sharp slumps in exports in November from both Taiwan and South Korea. The government says that they will try to do everything it could to maintain a stable and healthy growth next year. Chinese government also said that they would boost public spending in order to promote domestic demand. In addition, the slump in exports will increase concerns that Beijing will adopt new policies to protect exporters that might inflame trade tensions. The government also released figures showing producer price inflation collapsed in November, falling to 2 percent in the year to November, compared with 6.6 percent in October.
China industry growth falls to fresh low
China’s industry output growth fell to a fresh low in November; this is the prove that country’s economy has been hit more severely by the global economic crisis than anticipated. According to the Chinese government data, industrial production growth dropped to 5.4 percent, down from 8.2 percent in October. In addition, Steel production fell 12 percent last month. The speed and severity of China’s downturn has caught Beijing at unawares. The government State council released a ’30-point plan’ over the weekend for state-owned lenders to do everything in their power to avoid deflation. There are also some experts argued that 5 percent GDP growth in the first half of 2009 is now a reality, not a risk. For the global economy crisis reason, Chinese government warned industry to be carefully.
Dyer G. (2008-12-7) China aims to boost consumption http://www.ft.com/cms/s/0/58ee3622-c499-11dd-8124-000077b07658.html