Sunday, October 19, 2008

China stimulates its economy

China is beginning direct startegies to stimulate its economy.It may cut interest rates for the third time this year after weaker export orders and factory closures for the Olympic Games dampened industrial output. The nation will raise investment in infrastructure and boost export-tax rebates to protect the economy from the increasing risks posed by the financial turmoil, the cabinet said yesterday.

There are no options for the Chinese government except to stimulate the economy -- more monetary easing is needed,'' said Sherman Chan, an economist with Moody's in Sydney. She predicts five rate cuts by mid-2009 and the abolition of quotas that limit banks' lending. China is determined to stay ahead at the moment and to use its considerable advantages to become the world's most powerful economy.

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