{"id":14032,"date":"2012-09-11T03:09:42","date_gmt":"2012-09-11T03:09:42","guid":{"rendered":""},"modified":"2012-09-11T03:09:42","modified_gmt":"2012-09-11T03:09:42","slug":"China-To-Unleash-One-Trillion-stimulus","status":"publish","type":"post","link":"https:\/\/asiancemagazine.com\/?p=14032","title":{"rendered":"China To Unleash One Trillion stimulus"},"content":{"rendered":"

Weak economic data from the world\u2019s second largest economy continues to stoke fears that as China slows down, it will exacerbate the cooling of the global economy. <\/strong> But it shouldn\u2019t be all gloom and doom, according to Nomura\u2019s economic research team, which suggests Chinese output will rebound sharply in the fourth quarter on the back of a stimulus plan worth about one trillion RMB ($158 billion) and monetary easing by the People\u2019s Bank of China.<\/p>\n

While GDP is expected to grow only 7.7% in the third quarter, Nomura\u2019s research team forecasts a sharp rebound in the fourth quarter, with output expanding 8.8%. Infrastructure investment will play a prominent role in this recovery.<\/strong> Total planned investment for new projects started in August rose 33% year-over-year in August, up from 25% in the previous month; it\u2019s forecasted to grow more than 40% this year.<\/p>\n

A big chunk of that growth comes from plans announced by China\u2019s National Development and Reform Commission, which last week unveiled a slew of subway and highway projects.<\/strong> Power stations, wind farms, airports, water supply, sewage treatment, and waste incineration power plant projects have also been announced, worth together around one trillion RMB, Nomura\u2019s estimates show, or 2.1% of GDP. These projects take an average of four years to complete, and are normally started with a three to four month lag, they explained.<\/p>\n

Another key point is the coming leadership transition.<\/strong> Much like during an election year in the U.S., the Communist Party\u2019s big once-in-a-decade shuffling of its upper ranks will make policymakers \u201cmuch less tolerant of any further slowdown.\u201d In a rare speech at an international conference last week, President Hu Jintao \u201cacknowled[ed] the downside risks to the economy and emphasiz[ed] the importance of promoting infrastructure investment,\u201d giving further creed to the notion that solid stimulus will be unleashed.<\/p>\n

via forbes.com<\/a>
\n<\/p>\n","protected":false},"excerpt":{"rendered":"

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