World Bank praises China’s stimulus plan

The World Bank's China Quarterly Update says that although the country is suffering the effects of the global recession, its monetary and fiscal policies have kept the economy growing.

The Bank particularly singled out the CNY 4 trillion (US$ 585 billion) infrastructure-focussed stimulus plan, which as well as providing employment, has also encouraged bank lending.

According to its studies, there are also some positive signs in the Chinese real estate sector, and consumption in general has held up well. However, exports remain weak.

Ardo Hansson, the Bank's lead economist for China said, "Growth in China should remain respectable this year and next, although it is too early to say a robust sustained recovery is on the way. Government influenced investment will strongly support growth in 2009. However, there are limits to how much and how long China's growth can diverge from global growth based on government influenced spending."

The Bank expects China's GDP to grow +7.2% this year, an upward revision of its previous estimate.