The Chinese economy is thus the ray of hope in the present day economic crisis, which has dragged growth to the lowest ebb in developing countries.
The World Bank said, “China remains a bright spot in the region and the global economy amid signs that economic activity may be bottoming out. A recovery in China, likely to begin this year and take full hold in 2010, should contribute strongly to the region’s recovery.”
According to the World Bank, China, the world’s third-largest economy, is likely to grow at 6.5 percent this year. However, given the shrinking Western markets, the country’s exports would continue to contract.
The worldwide recession has led to a plunge in China's growth. Exports have fallen 25.7 percent in February from a year earlier. Other Asian economies are contracting and are expected to continue the downward trend through 2009.
The World Bank opined, “Unless there is a further intensification of the contraction in global demand, or global financial tensions flare up again, growth in China will pick up in the second half of the year, partly offsetting the weak first half.”
Zhou Xiaochuan, Governor of China’s central bank was optimistic and observed that the chief economic indicators were suggesting that a recovery is on the anvil. He was hopeful that the government’s 4 trillion yuan ($585 billion) stimulus package would do wonders for the economy.
The aim of the stimulus package is to pump money into the economy. The money so pumped into the system would be used to develop infrastructure, which in turn would boost the sagging demand for final goods.
The Washington-based World Bank said that a recovery in China, driven primarily by the country's huge economic stimulus package, would contribute to the region's stabilization.
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