Question: Would you expect automatic fiscal policy to be having an effect in 2012? If so, what effects might it have? Chinas economy is slowing from

Would you expect automatic fiscal policy to be having an effect in 2012? If so, what effects might it have?

China’s economy is slowing from its normal 9 percent or higher economic growth rate to just below 9 percent. The source of the slowdown is the global economic slowdown that is restricting exports growth and the government’s deliberate decision to discourage unproductive investment. The situation now is not like that in 2008 when real GDP growth dropped from 9 percent to 6.8 percent and fiscal stimulus does not appear to be urgently needed.

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