china-wary-about-overstimulating-the-economy

China wary about over-stimulating the economy

Analysts say the Chinese government's decision not to increase its stimulus package could be either a smart move or a sign of complacency.

When Chinese premier Wen Jiabao presented his annual government work report at the National People's Congress last week he set an impressive GDP growth target of 8% for 2009, but he disappointed investors who had been hanging on the hope that he would increase the country's already substantial stimulus package.

Wen's speech offered few surprises, instead reiterating many of the key features of China's earlier plan to emerge from the global economic malaise. Apart from the GDP target, the government wants to create 9 million jobs in the cities to keep urban unemployment below 4.6% and maintain the annual increase in the consumer price index CPI at an average 4%. Wen talked again about the...

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