Tuesday 2 December 2008


DOUBTS BEDEVIL CHINA'S STIMULUS

Antoaneta Bezlova

Asia Times, December 3, 2008

BEIJING - World politicians and economists have cheered the US$586 billion stimulus package unveiled by Beijing last month, but there are misgivings.

As more details emerge about the allocation of money and spending plans, doubts are mounting as to whether the package is capable of "rescuing the world" from economic crisis and even whether it can succeed in preventing the domestic economy from slowing down sharply.

"The world is too big to be saved by China," says Liu Jin, financial expert and professor at the Cheung Kong Graduate School of Business in Beijing. "This package is not designed to solve imbalances in global economic order; it is more of a political statement that China is ready to deal with the crisis. China is poor and has a lot of structural problems that needed tackling even before the crisis."

Global growth forecasts have all dropped and China is among the most vulnerable to this. The World Bank's latest China Quarterly Update predicts growth in 2009 will slow to 7.5% - dipping below the accepted safety line of 8% economic growth necessary for China to generate enough jobs and keep social unrest at bay.

Writing in a flagship magazine of the Communist Party, Premier Wen Jiabao seemed seriously worried: "We must be crystal clear that without a certain pace of economic growth, there will be difficulties with employment, fiscal revenues and social development."

(...) [artículo aquí]

No comments: