Reply #64: It actually seems to be working accordng to all recent reports I've read.

[Better Believe It]

And it seems designed to uplift the wages and living standards of Chinese workers.

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China launched its Economic Stimulus Plan to specifically deal with the Global financial crisis of 2008–2009. It has primarily focused on increasing affordable housing, easing credit restrictions for mortgage and SMEs, lower taxes such as those on real estate sales and commodities, pumping more public investment into infrastructure development, such as the rail network, roads and ports. By the end of 2009 it appeared that the Chinese economy was showing signs of recovery. At the 2009 Economic Work Conference in December ‘managing inflation expectations’ was added to the list of economic objectives, suggesting a strong economic upturn and a desire to take steps to manage it.<33>

By 2010 it was evident to outside observers such as The New York Times that China was poised to move from export dependency to development of an internal market. Wages were rapidly rising in all areas of the country and Chinese leaders were calling for an increased standard of living.<34>

By mid-2010 it has been widely reported in the media that China had overtaken Japan as the second largest economy in the world based on a interview by PBOC deputy governor Yi Gang.

http://en.wikipedia.org/wiki/Economy_of_the_People%27s_Republic_of_China#cite_note-32


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China’s Export Economy Begins Turning Inward
By Edward Wong
June 24, 2010

BEIJING — For years, Chinese leaders looked to the millions of poor workers from the country’s interior as the engine of a roaring export economy. They would move to coastal provinces, toil in factories and churn out the world’s household goods.

These days, the workers are crucial for China’s economy in another way: They must start buying the very products they manufacture, spending their paychecks on lipstick and lingerie, plastic lawn chairs and plasma television sets. Officials see them as the linchpin of China’s move away from a lopsided economic model that relies too heavily on foreign consumption.

Some of China’s top leaders, including Prime Minister Wen Jiabao, have emphasized the need for that restructuring for years, especially since the global financial crisis pummeled the export industry. But China’s move this week to make its currency, the renminbi, more flexible and the authorities’ apparent tolerance of recent factory strikes that have led to significant wage increases both signal that Chinese leaders could be serious about re-engineering the nation’s economic model.

The currency shift brings immediate political benefits, since China will now presumably come under less pressure at the Group of 20 summit meeting this weekend. But there are important domestic considerations as well. The breaking of the renminbi’s de facto peg to the dollar means the currency is likely to appreciate in value, making Chinese exports somewhat less competitive in the global marketplace but strengthening the purchasing power of Chinese consumers. Likewise, government policies to encourage wage increases for poor laborers — there are an estimated 150 million migrant workers in cities — could also spur consumption, if the pay increases outpace inflation.

“The central government attitude toward raising wages is undoubtedly positive because it’s directly tied to boosting domestic consumption and restructuring the economy,” said Liu Cheng, a scholar of labor law at Shanghai Normal University. “For a long time, wage growth has lagged behind economic growth, and that has forced China to continue to depend on exports.”

Read the full article at:

http://www.nytimes.com/2010/06/25/world/asia/25china.html