China 2009: The Confidence Deficit
It’s a question that has economists worldwide scratching their heads: What will happen to growth in China in 2009? While some are predicting economic expansion in the mainland will slow to less than 7%, others are still hoping GDP gains will be 9%-plus.
The optimists assume China will be able to buck collapsing U.S. and European demand for its phones, TVs, sneakers, and myriad other products. Their biggest hope is Beijing’s $586 billion stimulus program, announced in November. Just as important—though perhaps less likely to pay off quickly—are China’s consumers. With more infrastructure spending, expanded social welfare programs, and directives ordering banks to lend, China’s consumers and companies will rise to the occasion and spend more—or so the theory goes.