Throughout the global financial crisis, the Chinese government publicly forecasted that the financial crunch would only minimally impact China.
But it appears that the government now thinks differently.
The Hu Jintao regime has decided to provide $586 billion for an economic stimulus package that will be spent in a wide assortment of economic sectors through the end of 2010.
Money will be set aside for rural infrastructure and housing, which supports China’s goal to develop rural and remote parts of northern and western China. In addition, the government said it would invest in:
- reforming the value-added tax system (which could save companies $17 billion dollars)
- encouraging more banks to lend to small and medium enterprises
- creating more low-income housing and investing more in social welfare
- creating transportation networks
- environmental protection
- technical innovation
The country’s GDP fell to 9 percent in the third quarter, where its growth was at 10.4 percent in the first quarter of 2008. Other efforts to boost the economy have not worked out very well. (The People’s Bank of China has cut interest rates three times since September.)
Stay tuned to Total Bankruptcy for developing news on the global financial crisis.
Tags: China, economic stimulus, financial crisis
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