|
CNBC'S MOST SHARED
- A Goldman Trading Scandal?
- Rich People With A Death Wish
- The Threat of Ballooning Pensions
- Lehman CEO: Firm Deserved Bailout or 'Wind Down'
- SEC May Reinstate Rules for Short-Selling Stocks
- Market's Monday Blues
- Is Andy’s Mojo Back? We Asked Him
- Your First Move For Monday July 6th
- China Launches Major Step to Yuan Internationalization
- Russian President Calls Obama Summit 'Important Step'
- Goldman Sees No Harm From Computer Programmer
- Farrell: Don't Head For The Exits Yet
- Justice Dept Said to Be Looking At Telecom Giants
- Lehman CEO: Firm Deserved Bailout or 'Wind Down'
- GM to Get Final $20 Billlion From US This Year
- US Service Sector Has Best Showing In Months
- Tribune, Cubs Deal Agreed In Principle
- Facebook Director Sees 'Billions' in Revenue in 5 Years
- 5-Star Manager's 5 Top Stocks
- Hey, What's Up Doc?
- Busch: Summertime Blues Hits Investors
- Chadwick: Recession and Scandals Pave the Way for Romney 2012
- Art Cashin: The S&P's 'Head and Shoulders' Number
- Michael Jackson: Death And Taxes
- Is Andy’s Mojo Back? We Asked Him
- GM A Step Closer To Exiting Bankruptcy
- Schork Oil Outlook: The Fear Trade
China's cabinet has approved a massive stimulus package worth 4 trillion yuan ($586 billion) through 2010 to boost domestic demand, the official Xinhua news agency said on Sunday.
![]() |
CNBC.com |
It did not say how the extra spending would be financed.
China ran a consolidated budget surplus in the first half of the year of more than $170 billion, but tax revenue growth is slowing sharply as the economy reels under the impact of the global credit crunch.
The cabinet also announced an explicit shift in monetary policy, which it now described as "moderately easy."
The People's Bank of China has already cut interest rates three times since mid-September and scrapped lending quotas in a bid to support the economy.
Lending to small and medium enterprises will be increased as part of the plan, Xinhua said.
Officials have been flagging measures to pump up demand since gross domestic product growth slowed unexpectedly sharply to 9.0 percent in the third quarter from 10.4 percent in the first half.
Indicators for October have been even weaker.
Giving details of the package, Xinhua said China would invest an additional 100 billion yuan in national construction this quarter and would earmark an extra 20 billion yuan next year for reconstruction in areas hit by major natural disasters.
Sector that will benefit from the extra spending include affordable housing, rural infrastructure, transport networks, environmental protection and technical innovation, Xinhua said.
The cabinet also confirmed a long-awaited reform to the way value added tax is calculated. The result will be to reduce companies' tax bill by 120 billion yuan a year, the agency added.









