The global crisis has finally hit China. The Beijing government announced a $568 billion economic stimulus plan to help shore up its economy by 2010. The package will help finance a wide range of projects from rebuilding its national infrastructure to social welfare programs. This is the largest economic stimulus effort ever proposed by the Chinese government. The editorial board of The Miami Student commends China on its endeavor to reconstruct its economy; however, the Chinese government must not take advantage of the situation to reassert the state’s control on private industries.
China has the fastest growing global economy. Since the economic meltdown in Europe and the United States, China’s economic growth has slowed to 9 percent in the third quarter (the lowest level in five years). China has already cut key interest rates three times in less than two months. With an economy that needs to provide millions of jobs for its population, it’s pertinent that Beijing helps stabilize its economic viability during this worldwide financial crisis.
Not only does the Chinese population rely on the strength of domestic demand, it also rests on its significant number of exports. Some analysts claim that despite China’s annual export rate of more than 20 percent, it could fall as low as zero during the next couple of months. This could devastate China’s revenue by triggering a decrease in investments and mass layoffs. Thus, China must work with other countries to ensure that its export market will stay afloat. Continuing open dialogue between Europe, other Asian countries and the United States, instead of enforcing protectionist policies, would be a better solution for China’s economy.
To help combat these gloomy forecasts for the Chinese economy, the government plans to focus on 10 specific areas, including the rebuilding of disaster areas and new roadways accompanied by funding environmental protection, high technology, education and health. By pouring so much money into these specific areas, this could help not only spur China’s economy but also increase its population’s standard of living.
China’s attempt to maintain its economy by the economic stimulus plan demonstrates the government’s commitment to ensure security for its population. Nevertheless, despite the benefits of this package, Beijing must not use this situation to resort to its old government controlled policies. It’s critical for China to continue on its path to capitalism to ensure its future of economic stability.