Details Of China’s Stimulus Package Only Dribble Out

Details of the sources and spending of China’s 4 trillion yuan ($586 billion) stimulus package announced a week ago are starting to dribble out.

Central government will be financing at least a third of it directly. The rest will come from provincial and local administrations, and from state-owned banks and companies. As we noted before, about a quarter of the total is accounted for by natural disaster reconstruction spending already budgeted.

Fifty new airports and improvements to 90 others at a cost of 450 billion yuan over the next two years were announced on the Civil Aviation Administration’s web site today, typical of the ambitious and probably unrealistic plans now being rushed forward. As with the plan overall, it is unclear how much of this was already planned spending being brought forward and how much new money. That makes it difficult to estimate the likely economic impact of the spending.

The National Development and Reform Commission says 100 billion yuan will be spent in the fourth quarter of this year, split 34% on rural income support, 25% road, rail and airport construction, 13% social services, 12% energy-efficiency and environmental projects, 10% public housing and 6% on R&D.

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