This sounds like they get it and are on it.
It also seems the weak yuan policy is back, as Paulson’s influence fades.
Paulson’s ‘beggar they neighbor’ weak dollar policy caused the US slowdown to spread worldwide.
Govt to increase spending power of rural residents
By Fu Yu
The Chinese government has reaffirmed its commitment to stabilizing the real estate and stock markets, and to boost auto sales.
The National Bureau of Statistics director Ma Jiantang said in a published article that the government would eliminate “consumption bottlenecks” to promote consumer demand. In the article published in Qiushi, a Communist Party journal, Ma wrote that the government would try to increase the spending power of lower income groups and to raise the desire to consume among the well-to-do.
The government has also planned to raise agricultural produce prices to help increase rural income levels. In addition, it will raise subsidies on seeding and farm machinery, and to increase some social benefits to farmers and low-salary rural workers.
In his analysis, Ma said consumers in rural areas have a strong potential demand for a wide range of consumer products and services.
He believes the $586 billion economic stimulus package will have the effect of encouraging increased spending by higher-income consumers, which will help boost investment.
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Which is why the yuan touched a 7-month low against the dollar last night. I agree, it’s probably on its way lower.
Sorry Warren, not sure I follow you. If they “get it” why would they want there currency weaker vis-a-vis the dollar.
It’s the end of the Paulson era, but the beginning of the Geithner/Richardson era. What changed?
paulson’s version of ‘beggar thy neighbor’ took the form of weakening the $ to spur exports by jawboning cb’s away from $US accumulation.
now with their gdp’s weakening and paulson on the way out they may be back at it, as per the yuan weakening