China's 4 Trillion Yuan Stimulus To Boost Economy, Domestic Demand

  
  China Government said on Sunday it will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand. A stimulus package estimated at 4 trillion Yuan ($570 billion) will be spent over the next two years to finance programs in 10 major areas: low-income housing, rural infrastructure, water, electricity, transportation, the environment, technological innovation and rebuilding from several disasters, most notably the May 12 earthquake. The policies include a comprehensive reform in value-added taxes, which would cut industry costs by 120 billion Yuan. Commercial banks' credit ceilings will be abolished to channel more lending to priority projects, rural areas, smaller enterprises, technical innovation and industrial rationalization through mergers and acquisitions. With 100 billion Yuan from current-year central government funds and another 20 billion Yuan brought forward from next year's budget for post-disaster reconstruction, the fourth quarter is expected to see a total investment of 400 billion Yuan across the nation.


Source: Oppenheimer The Dragon Call November 10, 2008