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The greatest bailout in history The 2008–2009 Chinese economic stimulus plan is

a US$ 586 billion stimulus package announced by the central government of the People's Republic of China on 9 November 2008 as an attempt to minimizethe impact of the global financial crisis on the world'ssecond largest economy .

The 4 trillion yuan plan, equivalent to about 20% of China's GDP, is the biggest injection of cash by agovernment in history 

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Reason of bailout Global slow down of economy 

Chinese economic growth decelerated to 9% from the

11.9% growth rate achieved in all of 2007, and the 11.6%expansion in all of 2006.

Low export demand in 2008-2009

Stabilize the economy 

Improve liquidity  Broad impact

Bad loans

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China's 10 steps to boost its economy

The full details of China's economic package:

Public infrastructure development took up the biggest portion – 

1.5-trillion yuan, or nearly 38% of the total package.

Housing 

Transport

 Rural infrastructure

Health and Education

Environment

 Industry 

Earthquake

  Wealth creation

Tax

Finance 

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The second largest allocation – one trillion yuan –  went to reconstruction works in regions hit by the 8-magnitude Sichuan earthquake; that was followed by funding for social welfare plans, including theconstruction of low-cost housing, rehabilitationof slums, and other social safety net projects.

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Result …  China's economic growth was sustained by the

economic stimulus and in addition, assistedneighbouring countries with the economic recovery in2010

Due to the success of the economic stimulus plan, thecentral government has tightened regulation in the

financial system on banks to curb lending amid fearsof a property bubble which could put a dent oneconomic recovery 

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Firms bailed out ….   Among China's many troubled banks, the Agricultural

Bank of China (ABC) has long given Chinese officials thebiggest headaches.

On Oct. 21,2008, Beijing finally approved a restructuringplan. In the biggest bailout ever for a Chinese bank, ABCreceived a $19 billion capital infusion from the Ministry of Finance and from Central Huijin, a subsidiary of China'ssovereign wealth fund, China Investment Corp.

In 2007, the Chinese government bailed out MorganStanley with $5 billion and bought a big chunk of thecompany 

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Current scenario of Chinese

economy…  It is the world's second largest economy    Average growth rate-10%. It is also the largest exporter and second largest importer of 

goods in the world. Trade partners (US, Japan, Hong Kong, South Korea,

Taiwan, Germany) form over 50% of China'stotal international trade.

For 2010, inbound foreign direct investment into China

surpassed $100bn for the first time The country's per capita GDP (PPP) is $7,518 in 2010 B y November 2010, the inf lation rate rose up to 5.1% Forex reserve-US dollar 2.65trillion in 2010