'STIMULUS 2.0' AIMS TO REBOOT GROWTH
New strategies intend to change longer-term economic structure. -China Daily/ANN
Ed Zhang and Huang Ying
China Daily/Asia News Network
AsiaOne, Jun 02, 2012
Call it Beijing's "Stimulus 2.0".
China is at an inflection point as its economic policy focus shifts to growth instead of inflation control.
This time, the method of boosting growth is different from the past. Instead of throwing money at the problem - up to 4 trillion yuan (US$791 billion) was spent after the global financial crisis broke out in late 2008 - China is aiming for a more managed, selective stimulus.
In the next couple of months, more changes are likely in the run-up to the leadership transition, scheduled for the third quarter. The changes so far have fallen into the following categories:
No top-down change can come without a signal from Beijing.
Premier Wen Jiabao, during an inspection trip to Central China's Hubei province from May 18 to 20, told local officials that judging from "the new situation and new problems", the central government now sees the need for a greater emphasis on maintaining the speed of growth.
Last July, inflation was at what was considered a dangerous level of 6.5 per cent. Even in January, inflation was 4.5 per cent, still very high. Policymakers' top priority in such circumstances would inevitably be inflation control.
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