China’s Economy May Be Stabilizing, World Bank Says (Update1)

[Pirate Smile]

Source: Bloomberg

March 18 (Bloomberg) -- China’s economy is showing “early signs” of stabilizing as government-backed investment counters a slump in exports, the World Bank says.

The lender cut its forecast for the nation’s economic growth this year to 6.5 percent in a quarterly report released in Beijing today. Its estimate was 7.5 percent in November.

China is weathering the global slowdown better than many nations because its banks were largely unscathed by the financial crisis and the government quickly implemented a 4 trillion yuan ($585 billion) stimulus plan, the lender said. Government-influenced investment will surge 26 percent this year and contribute three-quarters of the economic expansion, it said.

“The government’s stimulus is working,” said Louis Kuijs, a senior economist at the World Bank in Beijing. “China’s fundamentals are strong enough to ride out this storm.”
Premier Wen Jiabao said last week that the nation’s 8 percent growth target was “difficult but possible,” adding that the government could add stimulus measures at any time. The spending plan through 2010 includes roads, power grids, pipelines and low-cost housing.



Read more: http://www.bloomberg.com/apps/news?pid=20601068&sid=aphwPq32i78Q&refer=economy

[dkf]

1. Wow that was fast. Where is our recovery?

Can I admit I'm jealous of their stimulus package? Sad but true.

[nyy1998]

2. Case and point

on how a stimulus plan actually works to fix the economy.