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Understanding the China Slowdown

The April numbers were terrible—and state spending is on the rise
Understanding the China Slowdown

A sure sign of Chinese concern about their economy is the flurry of announcements about growth. China must give “more priority to maintaining growth,” Premier Wen Jiabao said on May 20. “Key infrastructure projects” will be sped up, the State Council announced on May 23. “China is making all-out efforts to encourage private investment,” reported the official Xinhua News Agency on May 28.

More stimulus for China? The last program was launched just over three years ago. “Until recently, most officials felt there was no need to do more than push down gently on the accelerator,” wrote Mark Williams, chief Asia economist at consultants Capital Economics in a May 24 note. No longer. The economy expanded 8.1 percent in the first quarter.