China Growth Will Help World Economy. Is Chinese Economy the messiah to rescue the global financial meltdown ?

Speaking to the leaders from the Group of 20 nations in Washington, Chinese President HU said China can help lessen the impact of the global financial crisis and slowing growth by stimulating our Chinese economy.

Hu said, "steady and relatively fast growth in China is in itself an important contribution to international financial stability and world economic growth. China has taken an active part in the international cooperation to deal with the financial crisis." Hu also urged countries not to raise trade barriers to protect their economies also in view of the fact that China is the second-biggest exporting nation in the world.

"The international community should prevent all kinds of trade and investment protectionism and promote the Doha round of trade talks to achieve positive progress," HU said. He also urged industrialized nations to play their part in tackling the global financial crisis, which triggered an equity shrink that's halved the market value of worldwide stocks to about US$30 trillion so far this year.

Last week China announced a RMB 4,000 billion economic stimulus, focused on building low-rent housing, roads, railways and airports. The package also allows tax deductions for fixed assets such as machinery to stimulate investment. Farmers will also benefit from more subsidies.

China accounted for 27 % of global economic growth last year under purchasing power parity calculations(more than others) according to the IMF. Purchasing power parity (PPP) accounts for differences in the exchange rates of national currencies.

China's stimulus plan came as growth is slowing down. GDP grew by 9% in the third quarter from a year earlier that is the least in five years.

From the beginning of the 30-year economic reform onwards, China recorded an astonishing 12.3% GDP growth rate in 1978. Only about a growth rate of 5% was recorded in the years of 1981, 1989 and 1990. China maintained about 8% to 11% of economic growth for the rest of the majority years and even as high as 16.2% which was achieved in 1984.

Also written in Chinese at http://wongtc.blogspot.com/2008/11/4.html