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China stimulus: too little, too late?
With falling growth and mounting debt, the Chinese government is taking action: tax cuts for smaller firms, increasing railway investment; a mini stimulus package to ease the effects of the slowdown.
Is this attempt to stick to the official 7.5% GDP target too little, too late? It’s true that the government in Beijing has got a host of levers to pull, and in theory manage a slowing economy. However, set against the mountain of local government debt, estimated at around three trillion US dollars, many economists fear this may be a case of throwing good money after bad.
Ben Cavender from China
Market Research Group believes the government is on the right track and that
the stimulus tries to avoid a repeat of the knee jerk reaction seen back in
2008 when China poured oceans of cash into local government building schemes,
as the central government swerved to avoid the global financial
crisis.
02:08 minutes
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