BEIJING — China’s $586 billion stimulus package is its “biggest contribution to the world,” Premier Wen Jiabao said Monday, as hopes rose that heavy spending on construction and other projects would help support global growth by fueling demand for imported machinery and raw materials.
The massive Chinese spending plan — the largest ever undertaken by the communist leadership — was motivated by growing alarm at an unexpectedly sharp downturn in the country’s fast-growing economy that raised the threat of job losses and social unrest.
Sunday’s announcement staked out a bold position as President Hu Jintao prepares for next weekend’s meeting in Washington of leaders of 20 major economies to discuss a response to the global financial crisis.
Wen, the country’s top economic official, said the plan is meant to boost investment and consumer spending, maintain export growth and promote corporate competitiveness and financial reform.
“We must implement the measures to ensure a fast and stable economic development,” Wen told a meeting of government leaders, according to a report on state television. “They are not only the needs of the development of ourselves but also our biggest contribution to the world.”
The plan calls for higher spending through 2010 on airports, highways and other infrastructure, more aid to the poor and farmers, and tax cuts for exporters. That could boost demand for iron ore from Australia and Brazil, factory and construction equipment from the United States and Europe, and industrial components from throughout Asia.
