China’s Stimulus Restores Confidence, Shows Recovery
By Eugene Tang
BloombergNews.com
April 18 (Bloomberg) -- China’s 4 trillion yuan ($585 billion) stimulus plan has shown “better-than-expected” results in reviving growth in the world’s third-largest economy and helped restore market confidence, Premier Wen Jiabao said.
“China’s rapid reaction in rolling out the stimulus package has resolved some prominent problems in the economy, strengthened market confidence and stabilized people’s expectation,” Wen said today at the Boao Forum in southern China’s Hainan province.
The Chinese economy grew 6.1 percent in the first quarter, urban fixed-asset investment expanded, and loans rose amid record car sales in March, signaling a tentative recovery. Investors snapped up Chinese equities, boosting the Shanghai Composite Index by 38 percent this year, the second-best performer among 88 indexes tracked by Bloomberg.
“China’s economy has touched bottom and economic growth may recover this quarter to about 7 percent,” the Communist Party’s deputy research head Zheng Xinli said at Boao today. The government may need to beef up investments to offset the loss of exports to meet its 8 percent growth target for 2009, he said.
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