What can be gleaned from China's stimulus plan?

Discussion in 'Politics' started by Joe, Feb 13, 2009.

  1. Joe
    Offline

    Joe Rookie

    Joined:
    Feb 12, 2009
    Messages:
    6
    Thanks Received:
    2
    Trophy Points:
    1
    Ratings:
    +2
    As the only other country with a sizeable stimulus plan what do you think we learn from it? China's plan was passed in November and is already having a noticeable affect.

    Here's the part that bothers me the most...

    Almost all of China's roughly $580B (roughly 4T yuan) goes into infrastructure. Those infrastructure projects are buying materials which of course is pulling on the entire supply chain. New projects are also pulling capital which helped their banks start lending. Raw materials orders were felt in the US in January. The US plan only has about $46B in infrastructure.

    Even the news of the impact China's stimulus is having was felt in the US Stock Market. Investors are being advised to move their money into companies that are heavily leveraged in China.

    This is less than THREE MONTHS after China approved their plan. We're hearing it could take a year or two. China is roughly 1/4 the GDP of US (very rough measure of the size of the economy).

    I haven't done a lot of research yet but maybe some of you have. Is there any conclusions we draw by looking at China? We'll forget the doom and gloom one that says China is on its way to becoming the #1 superpower.
     
  2. Munin
    Offline

    Munin VIP Member

    Joined:
    Dec 5, 2008
    Messages:
    1,300
    Thanks Received:
    92
    Trophy Points:
    83
    Ratings:
    +95
    I m not so sure the numbers from China are that reliable, according to objective sources they are also still in a deep economic crisis. They also already have huge unemployment numbers coming up.

    Also you can't compare China with the US, China is a nation that is still developing into a modern nation. They have big parts of their country that don't have real roads, bridges, ... .

    While the US needs to replace already existing roads & bridges and has also different internal economic problems like the banking crisis.
     

Share This Page