A blog on Chinese economy & society

Stimulus rumor mill

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The world must be really desperate and addicted  to artificial highs that a low quality rumor from a tiny website would be picked by by Bloomberg.

China will announce in August a new stimulus package of possibly 4 trillion yuan ($586 billion), the China Business newspaper reported on its Web site, citing unidentified sources.

I have no idea where the 4 trillion figure comes from, but the proposal itself most likely is just part of China’s 12th five-year plan. (Yes, China still has those as befit a command economy, you know)

In its effort to move up the value chain and rebalance economy, China has adopted explicit industrial policies to promote “new technologies” like new energy, IT,  life science etc. And unlike Obama’s new energy initiatives, Chinese ones actually come with substantial investments as well. This August plan is just fleshing out guidelines announced with the 12th 5-yr plan, i.e. the money to be spent has already been budgeted and will be paid out entirely by the Treasury.

Bottom line: No New Money.


Written by Cindy Luk

April 27, 2010 at 7:58 pm

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