The size and scope of our next stimulus are still getting worked out, but China is taking action. The government just announced a massive $586 billion stimulus plan, with the money going to all the good stuff, like infrastructure, housing and grain subsidies.
Bloomberg: The funds, equivalent to almost a fifth of China's $3.3 trillion gross domestic product last year, will be used by the end of 2010, the Beijing-based State Council said today on its Web site. China will adopt a ``pro-active fiscal policy'' and pursue a ``moderately loose'' monetary policy, it said.
``We have long-awaited this stimulus plan,'' said Ken Peng, an economist at Citigroup Inc. in Shanghai. ``The measures may stimulate domestic demand, but they won't prevent China's economy from slowing further as the global economy is certainly in a recession.''
$586 billion sounds like a lot, but when you describe it as a fifth of the GDP then it sounds huge. It kind of puts the $60 billion being talked about here into perspective.
