3. The stimulus package
Although most of the public attention has been focused on the “CNY 4 trillion stimulus programme”, the total package of stimulus measures actually comprised four main components: an investment programme, accommodative monetary policies, tax cuts, and measures to ease the burden on state-owned enterprises.
3.1. The investment programme
The CNY 4 trillion “programme” refers to the investment component, which was officially announced by Premier Wen Jiabao on 5 November 2008 as a set of investments totaling CNY 4 trillion, to be spent over 27 months from the fourth quarter of 2008 through 2010. The programme would be focused on seven priority areas:
1. Transport and power infrastructure (railroads, roads, airports, electricity grids).
2. Earthquake reconstruction.
3. Rural village infrastructure.
4. Environment, energy efficiency and carbon emission reduction.
5. Affordable housing.
6. Technological innovation and restructuring.
7. Health and education.
The weighting of these components went through some adjustments during the first months of implementation. Their final distribution is presented in Table 1. These investments represent new budgetary spending, although some were already planned – such as the CNY 1 trillion on post-earthquake reconstruction, whose implementation would be accelerated under the stimulus programme.
3. The stimulus package
Although most of the public attention has been focused on the “CNY 4 trillion stimulus programme”, the total package of stimulus measures actually comprised four main components: an investment programme, accommodative monetary policies, tax cuts, and measures to ease the burden on state-owned enterprises.
3.1. The investment programme
The CNY 4 trillion “programme” refers to the investment component, which was officially announced by Premier Wen Jiabao on 5 November 2008 as a set of investments totaling CNY 4 trillion, to be spent over 27 months from the fourth quarter of 2008 through 2010. The programme would be focused on seven priority areas:
1. Transport and power infrastructure (railroads, roads, airports, electricity grids).
2. Earthquake reconstruction.
3. Rural village infrastructure.
4. Environment, energy efficiency and carbon emission reduction.
5. Affordable housing.
6. Technological innovation and restructuring.
7. Health and education.
The weighting of these components went through some adjustments during the first months of implementation. Their final distribution is presented in Table 1. These investments represent new budgetary spending, although some were already planned – such as the CNY 1 trillion on post-earthquake reconstruction, whose implementation would be accelerated under the stimulus programme.
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