Business | Economy
China to expand stimulus package as meltdown worsens
Chinese leaders began weighing possible plans on Monday to expand a massive stimulus package with higher spending on health and social programmes amid signs an economic slowdown is worsening.
- AP
- Published: 23:32 December 8, 2008
Beijing: Chinese leaders began weighing possible plans on Monday to expand a massive stimulus package with higher spending on health and social programmes amid signs an economic slowdown is worsening.
The meeting of top planners also might consider proposals to boost exports and to inject government money into slumping Chinese stock markets, according to state media.
The government has released no agenda for the meeting.
The meeting comes as Beijing tries to figure out how to get the most out of a 4 trillion yuan (Dh2.13 trillion) package announced in early November meant to shield China from a global slowdown with spending on construction and other projects.
Optimism that the meeting will produce more steps to bolster the economy lifted stock markets in Hong Kong and Shanghai. Hong Kong's Hang Seng index surged 7.5 per cent yesterday, while the Shanghai Composite index was up 2 per cent.
The plan's key goal is to lift consumer spending, and analysts say that is unlikely until Beijing creates a stronger social safety net for Chinese families, which have to save heavily to pay for health care, schooling and retirement.
Alarm about job losses and possible unrest has mounted after economic growth slowed in the last quarter to 9 per cent, down from 2007's 11.9 per cent. A slowdown in factory output, construction and other areas is worsening.
The annual planning meeting of top Communist Party and Cabinet officials is meant to make strategy for 2009.
The government's Xinhua news agency announced it opened yesterday morning but gave no details of the agenda or who would attend. Last year's participants included President Hu Jintao and Premier Wen Jiabao.
Hu warned Communist Party leaders in a November 29 speech that China was losing its competitive edge and said the downturn would test their "governing ability."
China's planning agency, the Cabinet's National Development and Reform Commission, was working on a plan for more spending on schools, health and other social programs, according to the Economic Observer, a leading Chinese business newspaper.
The Cabinet and NDRC press offices did not respond to requests for information.
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