From the Washington Post, “China Unveils $586 Billion Stimulus Plan“:
In a wide-ranging plan that economists are comparing to the New Deal, the government said it would ease credit restrictions, expand social welfare services and launch an infrastructure spending program that would include the construction of new railways, roads and airports.
Launch an infrastructure spending program? The new burst of infrastructure spending — assuming it really is new — actually comes on top of an massive, multiyear outlay for roads and bridges, rail, airports and ports. From The Economist in February 2008, “Rushing on by road, rail and air“:
China’s rapid economic growth and equally rapid integration into the global economic system is putting huge strains on its infrastructure. This has led to a spate of spending on transport. Between 2001 and the end of 2005 more was spent on roads, railways and other fixed assets than was spent in the previous 50 years. According to the state media, investment will see double-digit growth every year for the rest of the decade. Between 2006 and 2010, $200 billion is expected to be invested in railways alone, four times more than in the previous five years.
At first the parallels of the new Chinese plan to proposed U.S. stimulus measures struck our fancy: See, China’s becoming more like us! But then the troubling question occurs, fleetingly: Or are we becoming more like China?
In any case, the Asian markets are happy today.
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