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Why the world is watching China’s stimulus package

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Why the world is watching China’s stimulus package

China’s slowing economic growth is having impacts that extend beyond its borders, with the potential even to reverse roles in some long-standing trade relations, though the government’s stimulus measures could ease concerns, according to analysts.

While Beijing is gradually unfurling a stimulus package that began with larger-than-expected monetary easing in late September, the rest of the world is keen on gleaning the package’s monetary size and discerning how quickly China can get back its appetite for imports, from Australian iron ore to French luxuries.

“Slowing Chinese growth has a cascading effect across the entire globe,” said Nick Marro, a Hong Kong-based lead analyst for global trade with the Economist Intelligence Unit (EIU). “The prolonged period of demand weakness that we’ve seen in China has already been acting as a net drag on global activity.”

The country, long dubbed the world’s factory, uses imported fuels, materials and machinery to make goods for its vast domestic market, as well as for exports, an anchor for the 126-trillion-yuan (US$17.7 trillion) gross domestic product.

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Rally cry by Xi sets economic priorities for Chinese officials, absolves them of mistakes

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China’s September import growth slowed to 2.4 per cent, year on year, dipping from 2.5 per cent a month earlier, according to trade data released by the General Administration of Customs on Monday.
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