While China will continue to grow at a rate enviable by most other nations, it has decided to offer their own version of a stimulus package in their own country worth over $585 billion.
China's growth is estimated to be at about 8.5 percent next year, down by 3 percent from last year.
Most of the package will target ten key areas in the country, and will focus on "transportation, rural infrastructure, low-income housing, electricity and water. Some of the funds will also be used to build up areas ravaged from natural disasters, particularly the May earthquake in the Sichuan province."
This is being done in an effort to strengthen the domestic market, as the country has primarily relied on exports for the majority of their past growth. That is what is slowing down, so they're going to prop things up until exports start to perform strongly again, which could take a couple years.
In an effort to generate more liquidity in the markets, China is also removing commercial bank ceilings in order to loosen up credit for rurul areas, technological innovation, small business and industrial mergers and acquisitions.
Another area they're targeting is their value-added tax, which will dramatically cut back on business costs to the tune of about $17.5 billion.
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