China announced a $586 billion economic stimulus plan.  They are spending on infrastructure.  Apparently big news reported in the New York Times, WSJ, and WaPo.  (Asian markets reacted well, apparently, this first day.  Have they converted from Mao to Keynes? 

How does a non-market economy carry out an economic stimulus plan?  This is a non-market economy.   A communist country.   Remember?  The government owns a big part of the economy.  The Chinese "companies" we hear about, that have company names and brand names, are government owned or majority government owned. 

So, how is this government spending different?

It is just a government announcement.  If it helps shore up global market confidence, then great.

We worry about China's actions as our biggest banker.  But we now see the consequences to China when their biggest customer, us, falters.  Their growth rate falls from 13% to 9%, is expected to trend lower in coming years.  Sounds like a lot of growth?  Apparently the country needs 8% growth to keep up with new entrants to the workforce.

But the point is -- the Chinese economic stimulus plan.  It is phrased to sound like the U.S. Keynesian version.  So I raise an eyebrow at the messaging.

Apparently this will supplement their ongoing economic stimuli -- export oriented mercantilism.

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