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long-term impacts of this expansionary policy is uncertain. China government implement stimulus package in few years before which centered on FAI, and this makes the investment rate has been increasing steadily since 2001. China might face more serious overcapacity of the investment in the future.

China’s stimulus package now concentrated in infrastructure rather than new factories. One of the reasons is due to the overcapacity in China economy, because it will lower down the investment efficiency and falls of the investment efficiency will lead a negative impact on their long-term growth. Furthermore, as we know infrastructure investment take a long time to collect revenue streams because it is long term investment. While only investment in infrastructure without exist of investment in manufacturing capacity means there is no return gains by investment in infrastructure. In the worse case, it may cause not only low efficiency, but also increase in non-performing loans in the future.

Conclusion

China is one of the few countries that responded quickly to the global crisis by implement world’s largest stimulus package as expansionary fiscal policy to push up the economy in late of year 2008 and early of year 2009. Without the stimulus package, economy of China will be effect deeply and takes longer period to recover. As remain one of the focuses side by this stimulus package, domestic demand has play important role towards the economy growth. The stimulus run impact show benefits of growth in short-run and it expected to have larger effect on medium and long-term. There are also negative impacts of the stimulus in long-run growth, and it can be serious if the government fails to tackle and solve the problems.

As conclusion, there are pros and cons when implement the stimulus package, but in China, traditional Chinese philosophy views a crisis also an opportunity. By taking the opportunity of the current global recession and monitoring the process of its growth strategy, China may perform better in the future with a new growth.

Properties industry

Start from 1990’s the economy of China’s having a rapid growth with their GDP growth rate maintain over 8% or even over 10% every year. Construction industry would be the most beneficial industry from a rapid growth in China’s economy, because a rapid growth in economy will usually will come together with more development on Business Park, resident areas, public infrastructure and etc.

The above chart showed the China’s share of global construction spending from year 1990- 2010, and the expectation spending figure until year 2014. From the chart, we can see that China is expected going to replace US and Japan to become the world largest construction spending country after year 2010. It was critically a turning point after the economy of US was harmed by financial crisis in year 2008 and made US economy slow down. However, the stimulus package worth 4 trillion RMB launched by China in year 2008 become the main impact to rebalance the economy and maintain the growth in GDP in China. A huge spending in the infrastructure and society welfare under stimulus package ensures the investment of construction activities in China’s.

The below chart showed that the growth rate of China construction spending from year 1998-2008 and it showed China had a rapidly development on s