Who thought they’d see this kind of news coming out of modern China, where 10% growth had become the norm:
China unveiled on Sunday what it described as a “massive” economic stimulus package worth over half a trillion dollars in an effort to reverse slowing economic growth in the world’s most populous country.
China’s state-run news agency Xinhua said Sunday that the program will “will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand.”
The package is valued at about 4 trillion yuan ($586 billion), to be spent over the next two years.
With a couple trillion American dollars in the kitty, China can afford this kind of action, without even feeling a pinch. You’ve got to wonder what will happen to the value of the yuan relative to the dollar, however, perhaps making Beijing’s move counterproductive.