Nov. 9 (Bloomberg) -- China announced a 4 trillion yuan ($586 billion) stimulus plan to spur expansion in the world's fourth-largest economy, helping sustain global growth as the U.S., Europe and Japan teeter on the brink of recession.
The funds, equivalent to almost a fifth of China's $3.3 trillion gross domestic product last year, will be used by the end of 2010, the Beijing-based State Council said today on its Web site. China will adopt a "pro-active fiscal policy" and pursue a "moderately loose" monetary policy, it said.
"We have long-awaited this stimulus plan," said Ken Peng, an economist at Citigroup Inc. in Shanghai. "The measures may stimulate domestic demand, but they won't prevent China's economy from slowing further as the global economy is certainly in a recession."
Emphasis added by me.
Wow.
How many trillions of dollars have governments around the world now committed?
It's still not enough.
China accounted for 27 percent of global economic growth last year, more than any other nation, the International Monetary Fund said in a report in April this year. Taiwan, which counts China as its largest trading partner, today cut interest rates for the fourth time in two months after exports dropped in October by the most in three years.
"Over the past two months, the global financial crisis has been intensifying daily," the State Council said in today's statement. "In expanding investment, we must be fast and heavy-handed."
Emphasis added by me.
China has no shyness about creating jobs. But then, they have money in the bank.
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