This is my first diary so dont beat me up. I came upon this and was thrilled giving me hope that Obama's plan can work!
So I was checking Bloomberg today when something caught my eye.
China’s Economy Shows Signs of Recovery on Stimulus
Stimulus eh? So I clicked on the article and to my surprise its similar to ours? Here is the web article.
China’s economy is showing signs that a 4 trillion yuan ($585 billion) stimulus package is taking effect.
The world’s third-biggest economy may expand 6.6 percent in the second quarter after slowing to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimates of 14 economists surveyed by Bloomberg News.
China is trying to reverse an economic slide that has already cost 20 million jobs, raising the risk of social unrest as exports plunge and the property market sags. Spending on roads railways and housing has increased prices for iron ore, put a floor under industrial output and helped to drive a record $237 billion of new loans in January.
I was stunned! But look! There's more!
The government’s stimulus plan, announced in November, is beginning to gather momentum. Projects such as the building of 3.5 billion yuan of public houses in Shaanxi province and Shanghai began in December, while Shandong province started work on three new railway lines the same month.
China is committing about 1.2 trillion yuan of central government funds to the plan, which means banks’ willingness to fund projects is crucial. So far they are responding.
Toxic Assets
The value of new loans in January was more than double the record set a year earlier, according to figures released by the People’s Bank of China yesterday.
The lending multiplies the effect of the government’s spending in ways that wouldn’t be possible in the U.S. and Europe, where banks are burdened by toxic assets, said Dwyfor Evans, a strategist with State Street Global Markets in Hong Kong.
Read the entire article here.
No wonder the GOP don't want this to pass. Government spending can actually stimulate something that may lead to their downfall. Im no economist but if something like this in China can produce results then we may be in for a treat. Gotta stay optimistic!