Responding to the 2008 financial crisis, China unleashed a fiscal package of 4 trillion yuan ($586 billion at the time), plus an unprecedented surge in bank lending that spurred demand for commodities and consumer goods. All that, in the process, lifted trading partners such as Australia and Brazil and major global companies. It repeated the exercise on a smaller scale in 2016, using fiscal spending to revive the property market.
This time it’s different: China’s planned stimulus is unlikely to do much to reverse the global economic slowdown. With China’s economy more than twice as large today, accounting for more than 18% of global output, policymakers are reluctant to unleash something on the scale of the 2008 blitz, which left a legacy of debt and record corporate defaults. Beijing has promised a package of extra government spending and tax cuts worth about 4.5 trillion yuan. Even though it’s also quietly allowing local governments to increase off-balance-sheet debt to fund infrastructure, that’s less than half the size of the 2008 support relative to gross domestic product.
Also unlike in 2008, the government is contending with virus outbreaks and appears determined not to use the property sector to bolster the economy. President Xi Jinping’s strict “Covidzero” approach to curbing infections means that the potential for disruptions to growth this year is significant and that the country will be a drag on the global economy.
Denne historien er fra May 16, 2022-utgaven av Bloomberg Businessweek.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra May 16, 2022-utgaven av Bloomberg Businessweek.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Instagram's Founders Say It's Time for a New Social App
The rise of AI and the fall of Twitter could create opportunities for upstarts
Running in Circles
A subscription running shoe program aims to fight footwear waste
What I Learned Working at a Hawaiien Mega-Resort
Nine wild secrets from the staff at Turtle Bay, who have to manage everyone from haughty honeymooners to go-go-dancing golfers.
How Noma Will Blossom In Kyoto
The best restaurant in the world just began its second pop-up in Japan. Here's what's cooking
The Last-Mover Problem
A startup called Sennder is trying to bring an extremely tech-resistant industry into the age of apps
Tick Tock, TikTok
The US thinks the Chinese-owned social media app is a major national security risk. TikTok is running out of ways to avoid a ban
Cleaner Clothing Dye, Made From Bacteria
A UK company produces colors with less water than conventional methods and no toxic chemicals
Pumping Heat in Hamburg
The German port city plans to store hot water underground and bring it up to heat homes in the winter
Sustainability: Calamari's Climate Edge
Squid's ability to flourish in warmer waters makes it fitting for a diet for the changing environment
New Money, New Problems
In Naples, an influx of wealthy is displacing out-of-towners lower-income workers