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| Stocks surge after China stimulus | Stocks surge after China stimulus |
| (about 4 hours later) | |
| Asian markets have risen sharply, a day after China announced a huge investment plan to kick-start its slowing economy. | Asian markets have risen sharply, a day after China announced a huge investment plan to kick-start its slowing economy. |
| Stocks leapt in Japan, China and Hong Kong, buoyed by China's efforts to sustain its growth rates, on which many Asian economies depend. | Stocks leapt in Japan, China and Hong Kong, buoyed by China's efforts to sustain its growth rates, on which many Asian economies depend. |
| About $586bn (£370bn) is to go into housing, infrastructure and post-earthquake reconstruction in China over the next two years. | About $586bn (£370bn) is to go into housing, infrastructure and post-earthquake reconstruction in China over the next two years. |
| Correspondents say the package is a response to falling growth and exports. | Correspondents say the package is a response to falling growth and exports. |
| There will also be significant cuts in company tax, while banks will be allowed to lend more to projects involving rural development and technical innovation. | There will also be significant cuts in company tax, while banks will be allowed to lend more to projects involving rural development and technical innovation. |
| The government also promised a shift to a "moderately easy" monetary policy. | The government also promised a shift to a "moderately easy" monetary policy. |
| "The investment expansion should be done swiftly and forcefully," a State Council meeting chaired by Premier Wen Jiabao concluded. | "The investment expansion should be done swiftly and forcefully," a State Council meeting chaired by Premier Wen Jiabao concluded. |
| Market bounce | Market bounce |
| Chinese stocks rose sharply, with the Shanghai Composite Index ending 7.3% higher at 1,874.80. | |
| Tokyo's Nikkei 225 stock average climbed 5.8% to 9,081.43, helped by the weaker yen, while Hong Kong's Hang Seng Index gained 3.39%, to 14,726.59. | |
| Chinese exports have been a key driver of the economy | Chinese exports have been a key driver of the economy |
| Companies likely to benefit most from the government's investment plans did best, including banking, steel and construction firms. | Companies likely to benefit most from the government's investment plans did best, including banking, steel and construction firms. |
| Factory closures across the border in southern China have badly depressed China's manufacturing sector. | Factory closures across the border in southern China have badly depressed China's manufacturing sector. |
| In Seoul, the market held steady despite growing worries about the car market in the US and its likely impact on South Korean manufacturing exports. | In Seoul, the market held steady despite growing worries about the car market in the US and its likely impact on South Korean manufacturing exports. |
| Commodity cuts? | Commodity cuts? |
| Analysts said the stimulus package would not save China from the effects of the global financial slowdown, but could help to protect it. | Analysts said the stimulus package would not save China from the effects of the global financial slowdown, but could help to protect it. |
| It's a huge package... I think it is good news for correcting imbalances Dominique Strauss-Kahn | It's a huge package... I think it is good news for correcting imbalances Dominique Strauss-Kahn |
| China, and Asian economies who increasingly depend on it as an export market, had become used to double digit growth figures. | China, and Asian economies who increasingly depend on it as an export market, had become used to double digit growth figures. |
| In the third quarter of this year, growth slipped to 9% its lowest level in five years. | In the third quarter of this year, growth slipped to 9% its lowest level in five years. |
| Analysts said that though this might be considered healthy elsewhere, the fall is taken as a worrying sign in China where the government has relied on rapid growth to maintain political stability. | Analysts said that though this might be considered healthy elsewhere, the fall is taken as a worrying sign in China where the government has relied on rapid growth to maintain political stability. |
| The Chinese government has cut interest rates twice in recent weeks, and began considering ways to avert a more dramatic economic slowdown in October. | The Chinese government has cut interest rates twice in recent weeks, and began considering ways to avert a more dramatic economic slowdown in October. |
| These included measures to stimulate the property market, prompt construction of low-cost housing, and increasing export rebates on thousands of products. | These included measures to stimulate the property market, prompt construction of low-cost housing, and increasing export rebates on thousands of products. |
| State media reported that the government was therefore ready to "map out more forceful measures to expand domestic demand", including "massive" infrastructure spending. | State media reported that the government was therefore ready to "map out more forceful measures to expand domestic demand", including "massive" infrastructure spending. |
| "It's a huge package," Dominique Strauss-Kahn, managing director of the International Monetary Fund, was quoted as saying by Reuters after a meeting of the Group of 20 finance officials in Sao Paulo, Brazil. | "It's a huge package," Dominique Strauss-Kahn, managing director of the International Monetary Fund, was quoted as saying by Reuters after a meeting of the Group of 20 finance officials in Sao Paulo, Brazil. |
| "It will have an influence not only on the world economy in supporting demand but also a lot of influence on the Chinese economy itself, and I think it is good news for correcting imbalances." | "It will have an influence not only on the world economy in supporting demand but also a lot of influence on the Chinese economy itself, and I think it is good news for correcting imbalances." |
| President Hu Jintao is to travel to Washington later this week for a global economic summit meeting. | President Hu Jintao is to travel to Washington later this week for a global economic summit meeting. |
| China has been under pressure to help support the global economy. | China has been under pressure to help support the global economy. |