The effect of China's fiscal stimulus on output

China's fiscal spending of Rmb2 trillion ($293 billion) in 2009 could lead to Rmb1.7 trillion ($249 billion) direct increase of output, a new paper from the Hong Kong Monetary Authority posits.

The research shows this implies a fiscal multiplier of around 0.84 in the short-run and that it could generate 18m to 20m new jobs in the non-farming sector. The analysis also suggests that policy measures should support displaced workers to acquire new skills.

The analysis also finds that the medium-term

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