GLOBE AND MAIL: BEIJING — China announced a $586-billion stimulus package Sunday in its biggest move to stop the global financial crisis from hitting the world's fourth-largest economy.
A statement on the government's Web site said China's Cabinet had approved a plan to invest the amount in infrastructure and social welfare by the end of 2010.
Some of the money will come from the private sector. The statement did not say how much of the spending is on new projects and how much is for ventures already in the pipeline that will be speeded up.
China's export-driven economy is starting to feel the impact of the economic slowdown in the United States and Europe, and the government has already cut key interest rates three times in less than two months in a bid to spur economic expansion.
Economic growth slowed to 9 per cent in the third quarter, the lowest level in five years and a sharp decline from last year's 11.9 per cent. That is considered dangerously slow for a government that needs to create jobs for millions of new workers who enter the economy every year and to satisfy a public that has come to expect steadily rising incomes.
Exports have been growing at an annual rate of more than 20 per cent but analysts expect that may fall as low as zero in coming months as global demand weakens. >>> Scott McDonald, Associated Press | November 9, 2008
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