There are very few signs that the US stimulus package, which totals $787 billion, is working. Unemployment rates are showing some sign of improving, but not to the extent that the government had hoped. Consumer lending has certainly not picked up, and industrial activity is still slow, albeit not as slow as earlier this year.
China, on the other hand, is showing a number of signs that its economy is doing remarkably well.According to the AP, “Industrial production rose 10.8 percent from a year earlier, the third straight monthly increase in growth, the statistics agency said. Retail sales climbed 15.2 percent, while investment in factories and other fixed assets also rose.” The pace at which exports fell was not as bad as it was in the past.
The Chinese stimulus package appears to be working because a great deal of liquidity is going directly through the banks to businesses and consumers. And, infrastructure projects sanctioned by the government are already underway.
In the US, a number of the programs meant to help the economy are managed by government agencies, slowing the process of putting the stimulus to work.
Once again, the Chinese are outmaneuvering the Americans.
Douglas A. McIntyre
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