China raises '07 economic growth, passing Germany

China raises '07 economic growth, passing Germany
China passes Germany to become world's 3rd-largest economy after 2007 GDP revision

BEIJING (AP) -- China surpassed Germany to become the world's third-largest economy behind the United States and Japan after Beijing on Wednesday raised its estimate of economic growth in 2007.
The status is symbolic -- China's 1.3 billion people are, on average, among the world's poorest -- but reflects the country's explosive growth as it became the world's factory and a trading power over 30 years of economic reform.
The government revised its estimate of 2007 economic growth from an already high 11.9 percent to an eye-popping 13 percent, the fastest rate since 1994.
That raised China's gross domestic product to 25.7 trillion yuan, or $3.5 trillion at 2007 exchange rates, the national statistics agency said. That would be ahead of Germany's 2007 GDP of 2.4 trillion euros, or $3.3 trillion at an exchange rate produced by averaging rates on the 15th of each month during that year. Based on only Dec. 31, 2007, exchange rates, China was slightly behind Germany but would have passed it early last year.

The downside risk to China's economy is increasing, and some economic indicators deteriorated in November, said China's top economic planner on Thursd

China facing bigger economic downside risk

(Chinadaily.com.cn)
Updated: 2008-11-27 11:49
The downside risk to China's economy is increasing, and some economic indicators deteriorated in November, said China's top economic planner on Thursday.
The troubling status quo of the country's economy has driven top policy-makers to work day and night, with Premier Wen Jiabao presiding over up to four State Council meetings in a week.
Zhang Ping, minister of the National Development and Reform Commission (NDRC), said during a press conference in Beijing Thursday that the central government has meted out a breakdown of the 4-trillion-yuan fiscal stimulus plan. The majority of the investments will be channelled to infrastructure projects, rural residents' medical care and pensions, technological renovation, environment, and tax cuts for businesses and individuals.
Deepening economic woes worldwide are casting a larger shadow on China, the world's fastest growing major economy. Some major economic indicators have shown evident signs of worsening since the beginning of November. Although Zhang did not detail those indicators, analysts said they include the gross domestic product (GDP), exports, capital investments, and the consumer price index (CPI).
China's GDP slowed to 9 percent in the July-September period, down from 9.9 percent in the second quarter. Many economists predict that the growth for the last quarter of 2008 could tumble to as low as 6 percent.
The worst has yet to come as the global financial crisis has not bottomed out, Zhang admitted.

The European Commission launches a major (200 Billion Euro) Recovery Plan for growth and jobs

The Commission launches a major (200 Billion Euro) Recovery Plan for growth and jobs, to boost demand and restore confidence in the European economy. Press Release 25 Nov 2008)

The European Commission has today presented a comprehensive plan to drive Europe's recovery from the current economic crisis. The Recovery Plan is based on two mutually reinforcing main elements. Firstly, short-term measures to boost demand, save jobs and help restore confidence. Secondly, "smart investment" to yield higher growth and sustainable prosperity in the longer-term. The Plan calls for a timely, targeted and temporary fiscal stimulus of around €200 billion or 1.5% of EU GDP, within both national budgets (around €170 billion, 1.2% of GDP) and EU and European Investment Bank budgets (around €30 billion, 0.3% of GDP). Every Member State is called upon to take major measures good for its own citizens and good for the rest of Europe. The Recovery Plan will reinforce and accelerate reforms already underway under the Lisbon Growth and Jobs Strategy. It includes extensive action at national and EU level to help households and industry and concentrate support on the most vulnerable. It puts forward concrete steps to promote entrepreneurship, research and innovation, including in the car and construction industries. The Recovery Plan aims to boost efforts to tackle climate change while creating much-needed jobs at the same time, through for example strategic investment in energy efficient buildings and technologies.

How fast will GROWTH return?

... and how will it be FINANCED?

Tax cuts?
More lending?
Frugal Governments?
Innovation?
Better ideas?
Higher taxes for high earners?
Or will it be a combination or consensus?