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China Stimulous Stimulating Optimism

18 March 2009 2 Comments
Job Fair in China

Job Fair in China

Interesting story here via the NYT on how China (in true fashion) is using the current global financial crisis to its benefit.  China is taking this opportunity to shore up its domestic demand, reduce social unrest by providing job training, rapidly and dramatically increase bank lending, slow inflation, and more.  Leave it to China to quickly pass a stimulus package that dwarfs that of the U.S. (on a per capita GDP basis, and as a share of total GDP) and use the downturn as an opportunity for long run future growth.  This is not to say that everything is perfect here.  Indeed, there are millions of newly unemployed migrant workers in the cities.  Being involved in purchasing, I see firsthand that foreign direct investment in China is way down, but still I think that China will rebound sooner and more dramatically from the current downturn than the “developed” economies.

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