11-13-2008, 09:51 PM
<b>China stimulus relies on motivating thrifty public</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The package unveiled Sunday promises to inject money into the economy with extra spending over the next two years on airports, highways and other construction, tax cuts and aid to the poor. But it says the real goal is to channel money into shoppers' pockets and encourage them to spend, reducing China's reliance on exports and insulating it from the global downturn.
<b>It is a goal that Beijing has pursued repeatedly over the past decade, with limited success. Analysts say consumer spending is more effective at producing economic activity than any government action. But efforts to raise consumption in China have struggled because many families still have little to spend and most save 20 percent or more of their incomes to pay for health care and retirement.</b><!--QuoteEnd--><!--QuoteEEnd-->
It is because majority of population is very poor. Lets see how they can keep these poor happy.
<b>It is a goal that Beijing has pursued repeatedly over the past decade, with limited success. Analysts say consumer spending is more effective at producing economic activity than any government action. But efforts to raise consumption in China have struggled because many families still have little to spend and most save 20 percent or more of their incomes to pay for health care and retirement.</b><!--QuoteEnd--><!--QuoteEEnd-->
It is because majority of population is very poor. Lets see how they can keep these poor happy.