This morning, stock prices on Asian markets rose sharply, driven by the Chinese government’s plan to revive the economy, valued at nearly $600 billion.
The Chinese government announced yesterday the details of a $586 billion economic growth stimulus package, which includes the construction of roads, airports, and other infrastructure projects, as well as increased subsidies for the poor and farmers. In this way, the authorities aim to stimulate economic growth, which is slowing, as it amounted to ‘only’ 9 percent in the third quarter, the weakest growth in China in the last five years. As the USA, Japan, the eurozone, and Britain are in or on the brink of recession, stimulating the fourth largest economy in the world could mean a lot in efforts to avoid a deep recession of the entire global economy, analysts say. The Chinese measures have spurred a 5.6 percent rise in the main index on the Shanghai stock exchange this morning.
This index has lost more than two-thirds from its record level reached in October last year. On the Tokyo stock exchange, the Nikkei index jumped 5.8 percent this morning, breaking above the psychologically important level of 9,000 points, while stock prices in Hong Kong and India are up more than 3 percent. The South Korean Kospi index rose about 1.5 percent, the Australian S&P/ASX 200 index more than 2 percent, and stock prices are also rising on most other Asian exchanges. Therefore, this morning the MSCI index of Asia-Pacific stocks, excluding Japan, rose 3.5 percent.
