The Chinese government announced a stimulus package to their economy worth $685 billion USD.
I’m sorry, but, I’m not buying. Nice try and nice gesture, though.
Out of the top of my head, I know this would be a significant portion of their PBOC reserves, which stand at $1+ trillion USD, give or take. It’s not like they’re printing the USD, they can’t, for them it’s hard currency.
And, if my wetted thumb estimates do not betray me, their average labor costs still lie below 15% of their western counterparts, so what in the hell are they going to build to spend an equivalent seven times in labor –another Chinese wall?
Sorry, I’ll pass on this one.
On a related note, Bloomberg had this short video with professor Frankel’s opinion on the subject and the extension of the ongoing recession –bleak was the word that kept coming up.