Archives of “stimulus package” tag

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China’s malls are empty, but whole cities?

  
Analysis, Economy, Education
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The China bears tell us that stimulus spending there is largely being wasted. This report from Al Jazeera offers startlingly strong support for that proposition:

China’s economy is continuing to grow despite the global recession, helped by a massive government stimulus package of $585bn.
But doubts remain whether such strong growth can be sustained by public spending alone.

Al Jazeera’s Melissa Chan reports from Inner Mongolia, where  a whole town built with government money is standing empty.

Finally, China Acknowledged The Bubble

  
Analysis, Economy, Education
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ChinaBubble

China’s lending surged to 1.39 trillion yuan ($203 billion) in January and property prices climbed the most in 21 months. According to the National Development and Reform Commission property prices in 70 cities of china have rose 9.5% from a year earlier. The surge of prices has been due to the affects of easy lending followed with uncontrolled flow of funds in to the main streets. Real estate is one of the sectors where prices have scaled up. Automobile followed with cements and capital goods are also under the ambit of excess flow of funds resulting over capacity bubble .Asset prices and commodity prices are also under the threat of excess valuation.
It’s not due to the stimulus package alone declared by china but the uncontrolled loans given by banks without taking care of any quality measures on the loan papers. Its juts like US mortgage case where quality of loans was never taken in to account. China’s 9.35 trillion yuan of loans in 2009 have given birth to the fear of another financial crisis in the fastest growing economy.
The borrowing in the month of January’s was 14% less than a year earlier, after the government targeted a reduction in new loans this year to 7.5 trillion yuan from a record 9.59 trillion yuan in 2009. This have happened due to the strict norms declared by china during the end of January 2010.Chinese banks are now focusing and have instructed on the quality of loans that are being disbursed. The new lending norms framed by china are:
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