Yan Yiming, a Shanghai based lawyer, filed a second request with the National Development and Reform Commission to disclose details of the governments 4 trillion Yuan ($585.5 billion) stimulus package. The request marks an unprecedented test of transparency for the Chinese government’s economic stimulus program. Details as to which projects in particular will receive funding out of the stimulus package would have important implications to investors. The spending plan is expected to be approved by the National People’s Congress within this week.
The second session of the 11th National Committee of the Chinese People’s Political Consultative Conference (CPPCC) started this afternoon in Beijing. The CPPCC first met in 1949 and serves as China’s principal political advisory body for the government, the legislature and the juridical organs. In this year’s meeting the CPPCC is expected to focus on the economic stimulus package, economic development and social stability. The session is scheduled to conclude on March 12.
According to a recent survey conducted by the American Chamber of Commerce foreign direct investment in southern China might significantly drop this year. Total investments were expected to shrink to $6.5 billion this year, down from $11 billion in 2008. While the recent drop in demand in Western markets certainly plays a role in investment decisions the surveyed companies listed regulatory risks and a lack of incentives as the major drags on investor confidence.
Both the consumer price index and the producer price index are expected to decline in February, according to analysts. The consumer price index (CPI) might drop by as much as two percent year-on-year in February, marking the first negative growth since December 2002. The CPI is expected to continue its negative growth throughout the first half of 2009 and might regain momentum with the expected economic recovery in the second half of the year. Similarly, the producer price index (PPI) might drop four to five percent year-on-year in February, continuing its declining trend of the previous months. Despite these forecasts, fears of growing deflation in China are relatively low, with analysts pointing to the government’s stimulus package and a relaxed monetary policy.
