The global economic slowdown is hardly breaking news. This weekend President Bush has organized an economic summit with twenty world leaders to work together to fix the problem, and on a smaller scale, various governments have proposed new economic packages to stimulate growth./span>
Chinaspan style="font-size: 9pt; font-family: Arial">'s has been the most ambitious to date, and last Sunday's announcement of a 4 trillion RMB ($586 billion USD) bailout has sent shockwaves throughout China/st1 :country-region>'s financial system. The plan involves increased infrastructure investments, decreased taxes and increased export tax rebates, and a relaxed credit system as part of the package. /span>
Asian markets initially responded positively to the announcement, making strong gains on Monday before slight losses on Tuesday and slight gains on Wednesday. Beyond this short-term response to the bailout remain the longer-term changes to China/st1 :place>'s economic system. Many estimate that the changes to the financial system probably won't be felt until 2010, when many of the infrastructure proposals will be realized./span>
Despite the large picture in China at least one aspect of China/st1 :country-region>'s economy looks bright: consumer spending. In the month of October, retail sales grew 22%, following gains of 23.2% in both August and September, up from the previous year. /span>
While it's possible that the November bailout package will encourage consumer spending, some economists expect a slowdown of consumer spending in the upcoming months. Export growth has already slowed, up only 19.2% in October, versus 21.5% the month before. /span>
In the long run, however, the new stimulus plan and the millions of potential jobs it could create should serve as a powerful catalyst to reinvigorating Chinas economy, with some analysts estimating it could even increase China/st1 :place>'s GDP growth by about 3% in 2009. This growth wouldn't just improve China/st1 :country-region>'s economy; it could also trickle into global markets if Chinese consumers increase their expenditures./span>
Though the increased Chinese retail sales and economic stimulus package are a positive sign for Chinese consumption, who knows whether the momentum will continue? /span>