From Becca Smith: China announced today that they will be making a $586 billion (4 trillion yuan) stimulus package to prevent the financial crisis from impacting their economy.
With some of the money coming from the private sector, China has a goal to invest the billions in infrastructure and many different social welfare programs by 2010. The stimulus was passed because China is feeling the impact of the United State's financial crisis. China has followed in the United State's footsteps by creating the stimulus package and also by cutting interest rates at banks. Credit limits will be lifted to allow easier lending. However, if China wanted to learn from the United States, they would make more difficult lending restrictions. Also, China cut tax rates for businesses by $17 billion.
The stimulus money will create many different roads and airports. This stimulus package will also directly help the people of China, because a portion of the budget is being spent on health and education, environment and technology. Finally, there will be increased spending in disaster areas, which will help the millions of people that were left homeless.
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