China Riding the Stimulus Bus, AGAIN? (Mish)

Tuesday, April 27, 2010

Another $586 billion "Stimulus" Coming to China?

China Business says China May Announce 4 Trillion Yuan Stimulus.

China will announce in August a new stimulus package of possibly 4 trillion yuan ($586 billion), the China Business newspaper reported on its Web site, citing unidentified sources.

The plan, from China’s National Development and Reform Commission, will likely cover nine industries including information technology and new energy, the report said.

I have no idea if that is true or not. What I do know is how insane that is, if it is true.

China has the biggest property bubble in the world. Another massive stimulus would fuel that bubble. In turn, increased demand for commodities would further stimulate the property bubbles in Canada and Australia.

If the recovery was genuine, we would not need to see round after round after round of global "stimulus" none of which has created any jobs. Indeed, all this stimulus has done is push up the price of financial assets and commodities everywhere, while fueling property bubbles in Asia and the commodity producing countries.

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