Leadership

Homework #2 Kaibo Zhang

China aims to boost consumption

China’s economic policymakers meet towards the end of every year to establish a broad agenda for the coming 12 months. Chinese government launched a fiscal stimulus package a month ago, which was more like a statement of intent than a battle plan. Officials want public to know ‘they are taking actions’. The initial announcement of the fiscal stimulus was rushed out, officials have acknowledged, because growth in the economy was slowing rapidly. And since the first announcement, the economy appears to have deteriorated further, including a drop in car sales and electricity production in November. In addition, exports had decreases for the first time in nearly a decade. There is also the other main criticisms about the fiscal stimulus plan is it focuses too heavily on infrastructure. According to the commission, about 80 percent of the RMB 4,000bn ($581.8bn) investment over two years will be in roads and railways. However, Chinese government still trying to do more to boost domestic consumption, that could include raising the threshold for income tax and help for low-income families, as well as accelerating spending on pensions, education and healthcare.

China’s export fall is worse than predicted

The impact of the global financial crisis on China became clear on Wednesday; Chinese government noticed that exports fell in November for the first time in almost seven years. From government report, which shows that Chinese, exports declined 2.2 percent from a year earlier. Imports also fell 17.9 percent from a year earlier. Chinese government always wants to boost present and future the economy. This phenomenon shocked economists. The figures were far below forecasts, even in the light of sharp slumps in exports in November from both Taiwan and South Korea. The government says that they will try to do everything it could to maintain a stable and healthy growth next year. Chinese government also said...