China’s GDP is estimated to have grown 8.7 per cent year on year in 2009-once again the highest rate in the world - with the fourth-quarter increase reaching 10.7 per cent, compared to 6.3 per cent in the fourth quarter of 2008. For much of the world, China’s ability to shrug off the global financial crisis and maintain a strong growth trajectory in 2010 and 2011 seems too easy.
But securing China’s growth has been anything but easy. The strong, decisive, and deftly timed stimulus policies at the start of the financial crisis did, of course, play a major role in China’s quick rebound. As early as October 2008, when the crisis first hit, China’s government adopted a comprehensive policy package designed to prevent the economy from sliding further. The fiscal deficit was equivalent to 3 per cent of GDP in 2009, which generated 3 per cent GDP growth, while the deficit in 2008 was literally zero.
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