CHINA'S $586 BILLION SPENDING PLAN BOOSTS STOCKS, METALS, OIL
Li Yanping and Chia-Peck Wong
Bloomberg, November 10, 2008
China, the biggest contributor to world growth, unveiled a 4 trillion yuan ($586 billion) plan to sustain its economy, spurring gains in stocks, metals and oil.
China's cabinet pledged “fast and heavy-handed investment” in housing and infrastructure through 2010 and a “relatively loose” monetary policy, according to a State Council statement yesterday.
Copper jumped more than 7 percent and Asian stocks rallied on optimism the package will limit the depth of a looming global recession and encourage coordinated efforts to revive growth. President Hu Jintao will join crisis talks with world leaders this weekend in Washington, where President-elect Barack Obama has pledged to pass stimulus measures.
“This plan is, by all measures, too large to be ignored,” said Kevin Lai, an economist at Daiwa Institute of Research in Hong Kong. China may “help the rest of the world by creating more demand for foreign goods and services.”
China's CSI 300 Index of shares jumped 5.2 percent as of 1:01 p.m. in Shanghai. Copper increased as much as 7.7 percent in London. Crude oil, the MSCI Asia Pacific Index of shares, and some Asian currencies also climbed.
China accounted for 27 percent of global economic growth last year, according to International Monetary Fund estimates. The government didn't say how much spending was previously allocated and indicated some will be private investment.
Li Yanping and Chia-Peck Wong
Bloomberg, November 10, 2008
China, the biggest contributor to world growth, unveiled a 4 trillion yuan ($586 billion) plan to sustain its economy, spurring gains in stocks, metals and oil.
China's cabinet pledged “fast and heavy-handed investment” in housing and infrastructure through 2010 and a “relatively loose” monetary policy, according to a State Council statement yesterday.
Copper jumped more than 7 percent and Asian stocks rallied on optimism the package will limit the depth of a looming global recession and encourage coordinated efforts to revive growth. President Hu Jintao will join crisis talks with world leaders this weekend in Washington, where President-elect Barack Obama has pledged to pass stimulus measures.
“This plan is, by all measures, too large to be ignored,” said Kevin Lai, an economist at Daiwa Institute of Research in Hong Kong. China may “help the rest of the world by creating more demand for foreign goods and services.”
China's CSI 300 Index of shares jumped 5.2 percent as of 1:01 p.m. in Shanghai. Copper increased as much as 7.7 percent in London. Crude oil, the MSCI Asia Pacific Index of shares, and some Asian currencies also climbed.
China accounted for 27 percent of global economic growth last year, according to International Monetary Fund estimates. The government didn't say how much spending was previously allocated and indicated some will be private investment.
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