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Negative Growth in 2009 if No Significant Increase in Government Expenditure

China must increase its expenditures from 4,000 billion to 10,000 billion Yuan to avoid negative growth, said Study Times, the publication of the Party School of CPC, on December 29, 2008. The current cycle of investment has run its course. It is clear next year’s investment will be around –10%, a reduction of 1,000 billion to 1,500 billion yuan. The previously announced 4,000 billion yuan government expenditure for 2009 and 2010 will not offset the decrease of the market demand. Moreover, exports in 2000 will likely see a growth of -10 to -20%.

Source: Study Times, December 29, 2008