Financial crisis hits China after all
China's share markets have rallied after the announcement by Beijing of a two-year financial stimulus package of four trillion yuan (500 billion euros).
Shanghai's index ended 3.7 percent higher after Thursday's trading. Hong Kong's Hang Seng on the other hand lost over five percent.
Analysts say the stimulus money will mainly benefit labour-intensive industries involved in infrastructure building projects. Workers in these sectors will have job security, but will not necessarily see any wage increases over the next two years.
Two of China's major banks, the Bank of China and the China Construction Bank (CCB), have announced they will ease their lending policies. Both banks will be making available hundreds of billions of yuan for the building of airports, railways, hospitals, and housing.
CCB says it will target rural areas, small firms and the regions suffering from the aftermath of an earthquake in May. It will put limits on its lending to polluting and energy-greedy industries.
After earlier statements that the global financial crisis would not affect China, the Beijing leadership appears to have toned down its earlier optimism. Presenting the economic figures for October, Prime Minister Wen Jiabao said that China is suffering more than expected.
Industrial growth in October was down to eight percent, a figure envied by many a country in the West, but disappointing given China's 14 percent growth in September.
Some sectors in the manufacturing industry even cut production. Fewer bicycles were being made than a year ago, for instance.