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The central bank of China, injected 265 billion yuan ($41 billion Cdn) into the country’s money markets Tuesday in a stimulus measure aimed at keeping short-term interest rates low.

The central bank of China, injected 265 billion yuan ($41 billion Cdn) into the country’s money markets Tuesday in a stimulus measure aimed at keeping short-term interest rates low.

It was the second biggest debt purchase ever by the People’s Bank of China and came a week before the government comes out with its latest report on quarterly growth.

Economists expect it will show that growth has slowed for the seventh straight quarter.

But authorities are moving more cautiously than they did after the 2008 crisis, when the huge stimulus that helped China rebound also fueled inflation and a wasteful building boom.

China’s economic renaissance is now in its fourth decade. One of its striking features, in addition to its success, is its constant state of change. The types of goods produced, the degree of dependence on cheap labor, the relative openness of markets and currency, all have changed dramatically in the 33 years or so since Deng Xiaoping first began the reform movement. From most reports, it appears that more changes in the direction of economic openness are currently at hand. The current stimulus measure should provide some easing in keeping the short-term interest rates low.

Why does this progress take place? Could it be that the leaders of China have a vision of the future that entails a continuing opening of the economy? Could it be that the leaders of China have aspirations for the Chinese people that require that they become better off economically? Could it be that the leaders of China believe that China’s future will be built on education, creativity, personal discipline, and hard work? My guess is that the answer to all of those questions is “yes”.

With this week’s stimulus measure it is another sign that the Chinese are committed to have the economy grow at a faster pace than we have seen of recent times. China will no doubt the new top economic power in the world investors must wake up to this and be invested long-term and share in this success story.

Written by Sam A.

Source: China’s central bank boosts economy


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India, China consumer spending to triple by 2020: study

Boosting the economic growth and corporate profits in the developed world is what’s expected to happen by 2020 in China and India. How you ask? Well, the consumer spending in those two countries are expected to triple to $10 trillion a year combined. The prediction is that China and India will spend a total of $64 trillion on goods and services in the decade leading up to 2020. Investors have been wary about China and India in the past few quarters due to slow economic growth and political risks, but the middle class in the two countries is expected to reach 1 billion by 2020 and the size of middle class population is to raise an additional 17% since 2010. As per these predictions, the future spending habits of the middle class will help the economy, proving that India and China won’t let their investors down. Accelerating middle class growth is fueling consumer spending and economic development.

Written by Melissa W.

http://ibnlive.in.com/news/india-china-consumer-spending-to-triple-by-2020-study/297279-3.html