China announces new stimulus

The Chinese government has announced a massive spending plan in the wake of data indicating the economy is slowing down.

China announced that it will spend 1trn ($160bn), or 2% of GDP, on infrastructure over the next few years. It has approved 25 urban rail and 13 highway construction projects, along with some water schemes.

The move came as yet more disappointing data confirmed that the economy is rapidly losing steam. Exports in August were up just 2.7% on the previous year, while imports fell by 2.6%. Industrial production grew at its weakest rate since May 2009. Fixed asset investment grew at the slowest pace in ten years during the first eight months of 2012.

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