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Beijing: China’s $586 stimulus programme has set financial markets around the globe on fire. The package is far larger as a percentage of the economy than the American financial bailout.
Workers from the Chinese countryside are looking for construction jobs in Beijing. But many building sites in Beijing are idle as there is no longer the round the clock construction frenzy that was once the sound track of this city. No one wanted to talk on camera as there’s too much shame.
But privately they speak of having no money for food. Most haven’t worked for weeks and jobs that pay $10 a day are now scarce.
At night they sleep under bridges, in pedestrian underpasses, and in train stations. A cheap hotel costs about $40 a night, a luxury construction workers can’t afford.
After dazzling the world with an over the top Olympics, Beijing seems to have lost its buzz.
The grand western style upscale shopping malls are mostly empty, built on the expectation of a increasing numbers of wealthy Chinese consumers.
For months the government insisted the global finical turmoil had little impact here, but in an abrupt turn around, officials have announced a massive spending plan.
The $586 stimulus programme has been announced to build bridges and roads, create jobs and restore confidence.
On paper economic growth still seems strong – nine per cent last quarter, maybe six per cent this quarter according to some analysts, but to create millions of jobs every year, and to continue to improve wages and living standards the break-even point is eight per cent . Anything less than eight per cent could mean trouble for Beijing.
And with foreign reserves worth almost $2 trillion, Beijing still has plenty of firepower left to boost its economy.
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