By Simon Rabinovitch
BEIJING (Reuters) - For China's policy makers the race has only just begun to prevent the world's fourth largest economy from slowing too sharply after the end of the Olympics.
In recent days, the government has unveiled steps to help small firms and raised tariffs for power generators, encouraging them to boost output and so ease crippling electricity shortages.
That followed a relaxation of caps on bank lending and new tax breaks for textile exporters, which have been hard hit by rising costs and weakening demand.
"Post-Olympics China is slowing, not because the Olympics are over, but because of global forces," said Don Straszheim, vice-chairman of Roth Capital in Los Angeles.
"China's macro statistics are going to look terrible the rest of this year and into 2009. China wants to act, and supporting the growth rate is going to be overwhelmingly the top policy priority," Straszheim said in a note to clients.
JPMorgan Chase told clients that the government was studying a fiscal stimulus package worth 200-400 billion yuan ($29-59 billion).
A burst of public works spending would reduce China's reliance on exports -- a source of friction with its trading partners -- and address China's fundamental needs.
While Beijing's new stadiums have dazzled Olympic visitors, China's vast interior is crying out for modern housing and clean drinking water; its fast-growing cities need much better public transport and less-polluted air. The nation's rail network is overburdened and its power grid is inadequate.Continued.......
BEIJING (Reuters) - For China's policy makers the race has only just begun to prevent the world's fourth largest economy from slowing too sharply after the end of the Olympics.
In recent days, the government has unveiled steps to help small firms and raised tariffs for power generators, encouraging them to boost output and so ease crippling electricity shortages.
That followed a relaxation of caps on bank lending and new tax breaks for textile exporters, which have been hard hit by rising costs and weakening demand.
"Post-Olympics China is slowing, not because the Olympics are over, but because of global forces," said Don Straszheim, vice-chairman of Roth Capital in Los Angeles.
"China's macro statistics are going to look terrible the rest of this year and into 2009. China wants to act, and supporting the growth rate is going to be overwhelmingly the top policy priority," Straszheim said in a note to clients.
JPMorgan Chase told clients that the government was studying a fiscal stimulus package worth 200-400 billion yuan ($29-59 billion).
A burst of public works spending would reduce China's reliance on exports -- a source of friction with its trading partners -- and address China's fundamental needs.
While Beijing's new stadiums have dazzled Olympic visitors, China's vast interior is crying out for modern housing and clean drinking water; its fast-growing cities need much better public transport and less-polluted air. The nation's rail network is overburdened and its power grid is inadequate.Continued.......
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