Economy gets $586b investment package
Presided by Premier Wen Jiabao, a State Council meeting has resolved that it is necessary to adopt “proactive” fiscal and “moderately loose” monetary policies now. The government has cleared a 4 trillion-yuan ($586 billion) investment package to stimulate domestic demand and boost the slowing economy till 2010.
The Nov 5 statement marked an end to the previous prudent policy because of the increasing risk of slowing down further. According to Zhang Xiaojing, an economist with the Chinese Academy of Sciences, said it is the right choice fro the economy.
The economic growth of the nation has been slowing for five consecutive quarters. It dipped to 9 percent in the third quarter which is the first time for the growth rate below double digits. What is worse, because a rebound in overseas demand in uncertain and consumption is continuing to shrink, worries over such slowdown have been rising recently.
The central bank governor Zhou Xiaochuan said the economic slowdown could further over the weekend. It would drop between 8 and 9 percent in 2009 from 9.9 percent in the first three quarters. On Friday, the International Monetary Fund (IMF) reduced its 2009 forecast down 0.8 percent point to 2.2 percent from its October projection.
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