China Reveals Bold $586 Billion Stimulus Package
China has unveiled their new stimulus package valued at $586 Billion over two years. In the competition to see which country can spend the most to stimulate their economy, China has now officially taken the lead.
China’s economic growth slowed to 9 percent in the third quarter, the lowest level in five years. This was a big decline from its 11.9% growth the year before, and the main purpose of the plan is to keep growth in 2009 above 8% (forecast is 8.5%). 8% apparently is the magic number for the Chinese.
And now with the Chinese now taking such drastic measures we can only imagine that a second stimulus package here in the United States is inevitable. A second plan could end up costing taxpayers between $200 – $300 Billion, or up to 2% of gross domestic product.
The Economic Stimulus Package International leader board now ($30 Billion+) stands as such:
- China – $586 Billion
- United States – $168 Billion
- Japan – $51.5 Billion
- Germany – $29.9 Billion
The announcement had the Nikkei 225 closing up over 5.5% for the day as investors used the news for a reason to buy stocks. US futures are up just over 1.5% across the board heading into the morning bell. Should be an interesting day.
Further Reading on China’s $586 Billion Stimulus Package:
- China Sets Big Stimulus Plan in Bid to Jump-Start Growth – WSJ
- China Unveils Stimulus Package as Growth Slows – Marketwatch
- Asian Stock Markets Gain on China Stimulus Package – Yahoo Finance
