Shanghai. China said it would spend an estimated $586 billion on national infrastructure and social welfare
SHANGHAI: China announced a huge economic stimulus package Sunday aimed at bolstering its weakening economy and, in the process, perhaps helping to counter the effects of the global economic slowdown.
In a sweeping move, Beijing said it would spend an estimated $586 billion by 2010 on wide array of national infrastructure and social welfare projects. They would include new railroads, subways and airports and rebuilding areas like those devastated by the Sichuan earthquake in May.
The package, which was announced by the State Council, or cabinet, is the largest economic stimulus effort ever undertaken by the central government. It would amount to about 7 percent of China's gross domestic product during each of the next two years. Beijing also said that it would be loosening credit and encouraging lending and that it needed to have a more "pro-active fiscal policy" to strengthen its economy.
"Over the past two months, the global financial crisis has been intensifying daily," the State Council said. "In expanding investment, we must be fast and heavy-handed."
The stimulus plan would be enormous for any country, let alone one whose gross domestic product is lower than most other major industrialized countries, at around $3.5 trillion. By comparison, the United States, with an economy of almost $14 trillion, sent out about $100 billion in tax rebate checks this summer. Germany last week agreed to a €23 billion stimulus plan, or about 2 percent of its GDP.
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