132. China stimulus package.
June 26, 2009 § Leave a comment
This is a warning: stimulus package distribution controlled by large enterprises for already existing projects. It will not reach small business. China is an example, and the US is probabaly an example.
The major response to declining growth was the announcement of a 4 trillion yuan (US$586 billion) stimulus package in November 2008 to be spent over the next two years. As usual, provincial authorities will be the main entities that effectively oversee any stimulus spending. After the announcement was made, within a fortnight, provincial authorities submitted proposals worth approximately 10 trillion yuan.
For example, investment proposals worth 3 trillion yuan from Yunnan province and worth 2.3 trillion yuan from Guangdong province were received. Significantly, these proposals overwhelmingly consisted of big-ticket fixed-investment projects. The amount provincial authorities proposed to allocate to poverty alleviation and social welfare initiatives was small.