Chinese Official Says Radical Stimulus Package Needed

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Nov. 6 – A senior State official told China Daily that the country will need to implement comprehensive and radical measures to stimulate the economy amid the global credit crisis.

Speaking on the condition of anonymity, the official, who claims to be close to China’s decision-makers, said that only a radical stimulus package can save the country from excessive slowdown.

“Major economic gauges indicate that we have entered into an excessive economic slowdown and need a radical stimulus package right now,” the official said.

Acccording to Reuters, the country has already posted a decline in industrial profit growth and fiscal income. This situation is expected to worsen next year when the economies of the United States, Europe and Japan are forecast to post negative growth.

So far the government has responded to the downturn by saying that it would push domestic demand and consumption, to wane the negative impact.

The official said he has sent a proposal to the central government for an expansive and active fiscal policy to encourage government spending and investment. This includes: launching bigger infrastructure and clean energy projects; developing programs that increase employment;and stimulating foreign trade.

According to China Daily, the proposal is expected to be announced sometime this month or next when China’s leaders gather for its annual economic and financial conference.

“All in all, our priority is to stop excessive slowdown,” said the official. “And that’s about employment, the livelihoods of millions and social stability.”

He said that the government should be more aggressive in implementing tax rebates. “We have entered into a hard time,” said the official. “Without radical remedies, it will become even harder.”