China launches US$586 billion stimulus plan; 70,000 financial sector workers to lose jobs in US; South Korea debates how to push US FTA; Kevin Rudd rides economic crisis to improve popularity; and more
Top of the Agenda: China Stimulus, Wall Street Woes
China unveiled an economic stimulus package worth some four trillion yuan (Xinhua), or about $586 billion, in a move aimed at bolstering confidence in the country's economy and forestalling a global recession. The move comes with Chinese economic growth slowing and economists fearful that the country won't be able to power the world economy during a global downturn as some analysts once predicted. Agence France Presse reports the stimulus package could have ramifications well beyond China's borders at a time of slowing growth internationally. Stocks across Asia rallied on the news, with indices in China and Japan both gaining more than 5 percent (Bloomberg). The Wall Street Journal points out, however, that the country's economy won't be able to absorb all the stimulus money at once, so it could take at least a few quarters to have its full effect.
Meanwhile, the United States announced it would expand the bailout package it had previously offered the insurance company AIG, after the company announced losses of over $24 billion this quarter. The Journal reports the new package could be worth $150 billion in total. The revised AIG deal comes alongside indications of steep job cuts to come on Wall Street. The Financial Times reports some 70,000 more workers in the financial sector could lose their jobs in the months to come.
The FT also reports this morning that U.S. President-elect Barack Obama intends to push both an immediate economic stimulus package and a comprehensive program of social and economic reform when he takes office in January 2009.
Pacific Rim: Korea Trade Debate
The Korea Times reports the election of Barack Obama in the United States has sparked heated debate within the South Korean government over how to approach Washington with respect to a pending free-trade deal between the countries. The article says Seoul's ruling and opposition parties are divided on how to approach elements of the deal involving trade in automobiles, which some analysts say could undermine the chances of Washington passing the agreement.
This CFR.org Backgrounder examines the longstanding U.S.-South Korea alliance, including the pending free trade accord.
AUSTRALIA: The Australian reports Prime Minister Kevin Rudd has used the financial crisis to his political benefit and that a majority of Australians strongly approve of Rudd's handling of the crisis.