Get Ready For Epic Stimulus Spending Out Of China In The Final Couple Weeks Of December

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It’s a common phenomenon in bureacracy. Nobody wants to save anything. If your department didn’t use up its allocated budget for the year, then the message your sending to your superiors is that they needn’t allocate so much to you next year.

And so at the end of the year, leftover money becomes like a hot potato that you just have to get rid of.

So expect mammoth spending out of China this month where various towns and local governments are sitting on a huge pile of unspent stimulus money.

The Telegraph: At the end of November, the Ministry of Finance said that government spending had reached 5.62 trillion yuan, only 74pc of its target of 7.62 trillion yuan for 2009.

Officials are now concerned that provincial and central government departments will embark on rash attempts to spend the remaining money or face having their budgets cut next year.

“Compared with last year and with earlier years, the surplus is particularly large this year,” said Yang Zhiyong, a public finance specialist at the Chinese Academy of Social Sciences.

So 26% of the stimulus remains unspent, and all these various authorities have to spend it.

Remember to adjust that when you’re coming across data that would be affected by this December’s activity.

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