In order to keep the economy in check, realize the objective of ensuring 8-percent GDP growth (in 2009), speed up industrial upgrading and further optimize the industrial economic structure, the State Council also mapped out a development plan for 10 major industries, covering textiles, iron and steel, automotive, shipbuilding, equipment manufacturing, electronics and information, light industry, petrochemical, logistics and non-ferrous metals. That was followed by another development plan for the cultural, tourism and forestry industries. Now preparations are under way to work out an energy-efficient and environmental protection plan.

China was swift in its response to breaking events, resolute in making policy decisions, bold in investment, and decisive in execution. Going against the tide, the Chinese Government was the first to come out with its "new deal"—the 4-trillion-yuan stimulus package. For this purpose, the state had to increase fiscal deficits and expand the issue of treasury bonds, thus encouraging other countries to produce their own "new deals."

Although China was not alone in the global financial crisis, it could stand out to lead the world to recovery. This buttressed the confidence of the whole country and even the world. As Mr. Haruhiko Kuroda, President of Asian Development Bank, said, the stimulus package will effectively uplift China's economy, and the 8-percent growth objective is an encouraging expectation, even with the financial crisis sweeping the globe.

A 'new deal'

China's "new deal" has its particular Chinese characteristics. With government investment as the guide, the package has stimulated an investing spree. In 2009, the fixed assets investment reached 22.5 trillion yuan ($3.3 trillion) and it is expected to reach 27 trillion-28 trillion yuan ($3.97 trillion-4.11 trillion) by 2010. The total fixed assets investment this year and the next could reach about 50 trillion yuan ($7.35 trillion). This is the largest investment in the world up until now.

The government investment only accounts for 8 percent, mainly used for public service consumption and public investment in infrastructure. By stimulating the non-governmental investment, the government aimed at encouraging private products and services. The two products and services are different in nature and the providers are different, too. They are not inter-replaceable and yet are mutually complementary, with an interactive effect instead of a crowding out effect.

The government investment is mainly oriented toward projects concerning the livelihood of the people, the rural areas, the farmers and agriculture as well as infrastructure, environmental protection, energy conservation and emissions reduction. It will also be used to accelerate economic structure adjustments and changes in the economic development model.