Can Urban Stimulus Spark China's Slowing Economy

A series of massive urban stimulus plans have been announced recently by several Chinese cities. Economists are split on whether the projects can speed up the country's growth rate and accommodate the influx of urban migrants, reports Chris Oliver.

With China's economic growth rate falling to its slowest pace since the 2008 global crisis, and more deceleration predicted, several local Chinese governments have announced stimulus packages in the hundreds of billions of dollars in recent weeks. The latest came out of the port city of Tianjin, who announced "plans to invest 1.5 trillion yuan ($236 billion) to offset its slowing growth rates," writes Oliver. "The four-year plan is targeted at 10 industries ranging from petrochemicals to ports."

"The announcement comes on the heels of similar stimulus packages in the major metropolis of Chongqing and the southeast province of Guangdong, which unveiled plans to spend 1.5 trillion yuan and 1 trillion yuan, respectively. Big stimulus packages were also unveiled by other Chinese cities in recent weeks, including Wuhan, Ningbo and Guizhou, according to state media."

While some economists see the plans, which effectively repeat the government's initial response to global economic recession, as the right medicine, other are not convinced. 

"Standard & Poor's said Wednesday that massive public spending might boost growth rates in the short term, but it's not clear such stimulus would bring about longer-term benefits to the Chinese economy," writes Oliver.

"It highlighted concerns over the efficiency of some projects, adding that wasteful investment could even have a toxic effect down the road."


Full Story: Can China’s stimulus plans really help?


Prepare for the AICP Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $199
Planetizen Courses image ad

Planetizen Courses

Advance your career with subscription-based online courses tailored to the urban planning professional.
Starting at $14.95 a month
Book cover of Insider's Guide to Careers in Urban Planning

So you want to be a planner...

Check out our behind the scenes look at 25 careers in the Urban Planning field
Starting at $14.95
Wood necklace with city map

City Necklaces

These sweet pendants are engraved on a cedar charm with a mini map of selected cities. The perfect gift for friends and family or yourself!