China is going to spend $586 Billion (USD) to prop up its domestic demand. In doing so, the country is easing BOTH monetary policies (government spending) and fiscal policies (tax cuts) in stimulating the investments in infrastructure and social welfare.
Source: http://biz.yahoo.com/ap/081109/as_china_stimulus_package.html
My 2 cents:
What do all this mean? See the transition? The power transfer is slowly transferring to the EAST, esp. China. History is being made here - the heydays of the WEST is slowly wiggling away. Consider this: Super power Europe and Great Britain --> USA --> CHINA. It's not even the oil producing countries..because if there's no super power with enough demand to consume all the oil, no body will be buying the oil in the first place. So the oil producing nations is so secondary for now.
Back to China...as the US getting weakened by the ever skyrocketing national debt, housing problems, negative savings, ever rising unemployment, and other long term problems. The US is no longer the demand station of the world it once was. It can no longer buy more imports from China simply because its economy is so whacked with the outsourced jobs that it has no competitive edge in anything major to support its own employment. And China is not going to wait for America to come back. OH NOO, it's going to prop up its domestic employment and prosperity, so what ever it produces, it will have enough demand nationally to support its own industries. Wages will rise, standard of living will further increase, Every major company is going to focus on investments in China because that's where all the demand is. All new vehicles will be revealed in autoshows in China, by-passing the Detroit auto show...Furthermore, China will no longer depend on its exports to the west to support its industries and population. We are at the apex of a turning point here. The US will have to ever depending on China, as it holds the most US dollar in its treasuries. Remember what US did to Britain to contain Britain's military? Back then the US had held much of the British pound outside of Britain. It threatened to unload its treasuries to make the pound worthless. I see the same thing here with China and the US. Whatever China does with its reserve of trillians of USD will have the US jittering in its knees.
