by Fons1 via FlickrThis is pretty major, says Arthur Kroeber of the consultancy firm Dragonomics in Reuters, about the four trillion Renminbi (euro 450 billion) investment China’s central government into its economy.
‘It reflects the official view of how serious this problem is and shows that this is a government that can mobilise enormous resources to stimulate the economy when they put their minds to it,’ Kroeber said.
He reaction after the official news agency Xinhua did put out a press release, but did not explain how the money would be spend.
Kroeber said a lot would depend on what proportion of the package is funnelled towards boosting wages and spending to help wean the economy off unsustainably rapid investment, which has been the main driver of China’s double-digit growth over the past five years.
‘How much of it will be good old tried-and-true building bridges, and how much will be put into income and consumption support measures that are arguably more beneficial?’ he asked.