China announced Sunday a massive stimulus package in hopes of keeping economic growth from falling too fast. Demand from the U.S. and the country's other vital export markets has been waning as the global financial crisis takes an economic toll.
China's economic growth slowed to 9 percent in the third quarter, the lowest level in five years and a sharp decline from 11.9 percent the year before-- perilously low for a government that needs to create jobs for millions of new workers and for other Asian countries that have come to depend heavily on Chinese demand.
"The global economy is in trouble and Chinese authorities understand that they can't wait anymore ... They're aware that exports next year will be terrible given the weakening economies in the U.S. and Europe," said Winson Fong, a Hong Kong-based managing director at SG Asset Management, which oversees about $3 billion in equities in Asia.
"This has been overdue," he said. "Investors in mainland China have been waiting for a complete rescue package since the beginning of the year."
China's announcement came as economic officials from 20 leading nations called Sunday for increased government spending to boost the troubled global economy.
In my opinion, this stimulus package sure does give China some hopes but what this decision can do to their economy is still in the mist. My concern is what if the global demand stay at the same level or even fall lower next year while China is producing more and more goods (because of the stimulus package) ?
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