We have CCTV4 (China Central TV Channel 4) in our house and at the moment Premier Wen Jiabao is delivering a major speech about economic stimulus. Here are a few of my notes.
The Chinese Communists are cutting corporate taxes, cutting capital gains taxes, cutting stock transfer taxes, promoting the motor industry and the housing market, promising to complete major recovery efforts for the Sichuan earthquake zone this year, and committing themselves to major infrastructure projects, agricultural and rural development, and much more. They are not giving up on their earlier forecast of 8% GDP growth for 2009.
Premier Wen's delivery is certain and confident. He is at pains to remind government officials that this is the people's money they are committing, and not "yi fen" (one penny) is to waste. The objective is to increase productivity in the Chinese economy and support employment in productive industry, and not promote make-work schemes or screwdriver assembly industry. Apart from this feint in the direction of industrial policy, the plan is highly market-oriented. It is detailed, fully-formed and ready to implement.
The Chinese Communist Party, which once said "Whatever you do never forget Class Struggle," has forgotten class struggle. There is apparently nothing in the Chinese plan for condoms, community organizers, or Maglev trains from senior politicians' districts to Disneyland.
You just have to be bullish on China. It is hard to argue that China will not emerge from the current financial crisis relatively stronger than before.
More later.
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