China's stimulus package looks like it's stimulating
Yet official data suggest the money being pumped through the economy is already putting some juice back into China's industrial sector. New orders to the industrial sector rose in January, driven by heavy industry. Growth in bank loans has also shot up. Both look like early signs that the stimulus is stimulating.
China can afford more later, if need be. The package so far will leave a fiscal deficit of under 3pc of GDP - high for China, but frugal by today's international standards. Total government debt as a percentage of GDP sits in the teens, a minimal level. And Beijing can always green-light projects while telling them to find finance on a commercial basis.
1 comment:
You can not judge China by an American way. Here,the main challenge is not whether the stimulating plan is work or not. It must be work,the answer is just one,cause there's no other way to help China get back to the growing way in a short period. The risk is,there's another 50% possibility that,tomorrow will be more painful than today.
Anyway,China needs time to change the hole infrastructure. This is one-way mission. In my view,the crisis is a chance for changing something.
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