Chinese Stimulus, Lending May Drive Rebound as Exports Slide

[Joanne98]

Source: Bloomberg


May 14 (Bloomberg) -- China’s 4 trillion yuan ($585 billion) stimulus plan and record bank lending may drive the nation’s economic recovery even as exports plunge.

Spending on factories and properties surged 30.5 percent in the first four months from a year earlier, data released this week showed. Money supply grew by a record and new loans have exceeded a 5 trillion yuan government target for the whole year.

China aims to be the first nation to recover from the global slump that has choked off demand for exports, sending the nation’s shipments tumbling. A revival in the world’s third- biggest economy would help countries across Asia by increasing demand for their products and add to signs that the worst of the global recession is over.

“The recovery from the major shock of the second half of 2008 was never going to be smooth,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “But China can pump-prime its economy for 18 months to two years to wait for a recovery from Western consumers.”

The Shanghai Composite Index of stocks has climbed 46 percent this year on expectations that China’s economic growth will accelerate.

Nobel Prize-winning economist Joseph Stiglitz said yesterday that China may emerge “a winner” from the global crisis because the nation is buffered by a high savings rate and the government “has taken very rapid action.”



Read more: http://www.bloomberg.com/apps/news?pid=20601068&sid=aRyK7jp3idNc&refer=home

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Meet the world's next superpower. They can get things done right because they don't have conservatives fucking up everything.

[Revolution9]

1. yeah and paying people a decent wage and providing humans rights...

can get in the way of a race to the top of the money pile.
china is what it is because they have taken over our manufacturing by bastard CEOs who tried to save a buck.
before they knew it there was no manufacturing left in the US.
we helped build china's economy.
we are what made china a super power.
thank ex-ceos of america's dead manufacturing sector!

[OhioChick]

2. Couldn't agree with you more.

Welcome to DU. :hi:

[David__77]

4. The hard work of China's people built the economy of China.

The Chinese have only themselves to thank for the truly miraculous economic development of the last 60 years, turning China from a starving, illiterate country dominated by foreign powers into a moderately developed country with an increasingly advanced physical and cultural infrastructure.

[Deja Q]

6. And melamine and antifreeze and drywall and dog food... not a way to build much of anything.

It's not going to help anybody in the end.

[David__77]

8. If the products were so low quality, why would the average US consumer buy so many of them?

If China did not export goods worth consuming, then they wouldn't hold a $13 billion trade surplus this last month, and they certainly wouldn't hold $2 trillion in foreign reserves. The average US consumer uses Chinese-produced goods every day, and regularly purchases them.

As for melamine, it seems that it was added to formula to deceive Chinese government quality inspectors as to the protein content. This sort of corporate deceit exists in capitalist economies all over the world. Certainly, there have been many deaths from dangerous products in the US - there's a long history of litigation to prove this.

None of this changes the fact that China's economy is growing, unlike the US economy.

[Waiting For Everyman]

11. You're kidding, right?

1) There's nothing else to buy;

2) They break after 5 minutes and have to be replaced.

Chinese shit is a total rip-off. Nothing works or lasts anymore - guess why?

[Revolution9]

9. do you fail to see the irony in what you are saying?

that country pays people pennies.
america has been outsourcing manufacturing to that country for a long time.
without our manufacturing and our demand for cheap chinese made crap it would not be in the financial shape it is in.

[Psephos]

10. Hard work, absolutely - but in a capitalist, rather than centrally-dictated, economic makeover

Mention of which usually leads to interesting "discussions" at cocktail parties.
;)

[Zynx]

3. When you increase money supply by double digit percentages in an economy that

isn't sagging, there will invariably be problems down the road. China has somehow avoided having to deal with their own real estate excesses so far. We'll see what happens in the future.

[David__77]

5. It's proper macroeconomic planning.

China has maintained robust growth for almost 20 years through proper oversight, balancing market and planning mechanisms. The growth in money supply is founded upon a real growth in goods and services in the country.

[Deja Q]

7. See my other response to you.

Repetition doesn't become me. For once.

[Zynx]

12. No country has ever pulled it off for very long and there have been economic "miracles"

before that do not end well. We shall see.

[PassingFair]

13. "Chinese Stimulus"...sounds dirty.

Does it come in a powdered form?