From the Wall Street Journal (subscription required):
The signs augur well for the global economy. China has been one of the world’s most voracious consumers of raw materials. While its aggressive spending plan reflects the power of its state-dominated economy, there are signs that its thrify consumers are starting to spend more.
Car sales hit a monthly record in March, according to figures issued Thursday, marking the third consecutive monthly rise. Housing sales in major cities have also picked up, with lower prices attracting buyers. The optimistic outlook has spread to businesses. The National Bureau of Statistics said this week that its survey of managers’ confidence rose in the first quarter after plunging in the final quarter of 2008.
Overall, it appears that the state’s push has helped keep China from slipping into a downward spiral where poor economic conditions and declining confidence feed off each other. The impressive size of China’s stimulus gets some credit for that: Along with the U.S. plan, it is one of the largest in the world. But the vestiges of China’s command economy have also proved useful.
“China is unusual in that it has this incredible capacity to mobilize all its institutions,” said Vikram Nehru, the World Bank’s chief economist for Asia. The government’s ability to direct bank lending and investment spending has meant its stimulus efforts have worked faster than many initially expected. “There is now a growing degree of confidence that the stimulus package is having an impact,” he added.
