China confirms its huge economic stimulus

China yesterday formally announced its huge economic strategy to stay ahead of the West. In a sweeping move at a time when major projects are being put off around the world, Beijing said it would spend an estimated $586 billion by 2010 on wide array of national infrastructure and social welfare projects, including constructing new railways, subways, airports and rebuilding communities devastated by an earthquake in southwest China in May. I have been writing about this for sometime now and the strategy has now been confirmed by the State Council on Sunday evening. This huge economic boost will add about 7 percent of the country’s gross domestic product during each of the next two years.Beijing said it was loosening credit and encouraging lending as part of a more “pro-active fiscal policy.”
and “In expanding investment, we must be fast and heavy-handed.”
The stimulus plan would be enormous for any country, let alone one whose gross domestic product is lower than most other major industrialized countries, at around $3.5 trillion this year.The announcement came less than a week before the Chinese President travels to Washington for a global economic summit meeting that will be attended by world leaders and hosted by President Bush. As stated in posts here the Chinese Government is determined to steal a march on the West while it is on its knees.