Chinese stimulus is going strong, as projects such as the quadrupling of capacity at Chongquing’s Jingbei airport.
In some ways, this reminds us of Dubai expanding infrastructure way ahead of demand.
Imagine a government spending India’s entire economic output, twice. (Based on official exchange rates.)
Jiangbei, which begins work on a third terminal when the second is done next year, is one of 15 trillion yuan ($2.2 trillion) in projects begun in 2009, almost twice the economy of India. Most were started by local governments as China’s stimulus package sparked a record 9.6 trillion yuan of loans.
Chongqing, China’s wartime capital on the Yangtze River, is a prime example of how provincial governments multiplied the effect of the central government’s stimulus plan. The city had 900 billion yuan in loans and credit lines outstanding at the end of 2009, said Northwestern’s Shih. Chongqing’s economy expanded 14.9 per cent last year, with investment in factories and property expanding the most in 13 years.
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