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The greatest bailout in history

The 20082009 Chinese economic stimulus plan is

a US$ 586 billion stimulus package announced by the central government of the People's Republic of China on 9 November 2008 as an attempt to minimize the impact of the global financial crisis on the world's second largest economy. The 4 trillion yuan plan, equivalent to about 20% of China's GDP, is the biggest injection of cash by a government in history

Reason of bailout
Global slow down of economy
Chinese economic growth decelerated to 9% from the

11.9% growth rate achieved in all of 2007, and the 11.6% expansion in all of 2006. Low export demand in 2008-2009 Stabilize the economy Improve liquidity Broad impact Bad loans

China's 10 steps to boost its economy The full details of China's economic package: Public infrastructure development took up the biggest portion 1.5-trillion yuan, or nearly 38% of the total package.

Housing Transport Rural infrastructure Health and Education Environment Industry Earthquake Wealth creation Tax Finance

The second largest allocation one trillion yuan

went to reconstruction works in regions hit by the 8magnitude Sichuan earthquake; that was followed by funding for social welfare plans, including the construction of low-cost housing, rehabilitation of slums, and other social safety net projects.

Result
China's economic growth was sustained by the

economic stimulus and in addition, assisted neighbouring countries with the economic recovery in 2010 Due to the success of the economic stimulus plan, the central government has tightened regulation in the financial system on banks to curb lending amid fears of a property bubble which could put a dent on economic recovery

Firms bailed out .


Among China's many troubled banks, the Agricultural

Bank of China (ABC) has long given Chinese officials the biggest headaches. On Oct. 21,2008, Beijing finally approved a restructuring plan. In the biggest bailout ever for a Chinese bank, ABC received a $19 billion capital infusion from the Ministry of Finance and from Central Huijin, a subsidiary of China's sovereign wealth fund, China Investment Corp. In 2007, the Chinese government bailed out Morgan Stanley with $5 billion and bought a big chunk of the company

Current scenario of Chinese economy


It is the world's second largest economy Average growth rate-10%. It is also the largest exporter and second largest importer of

goods in the world. Trade partners (US, Japan, Hong Kong, South Korea, Taiwan, Germany) form over 50% of China's total international trade. For 2010, inbound foreign direct investment into China surpassed $100bn for the first time The country's per capita GDP (PPP) is $7,518 in 2010 B y November 2010, the inflation rate rose up to 5.1% Forex reserve-US dollar 2.65trillion in 2010

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