China's new plan... has an effect on US economy

China unveiled its new bailout plan : $586 billion to spend by 2010 to bolster its economy, through social welfare and national infrastructure projects.

That's a huge amount of money to spend to stimulate its economy! In comparison, according to the IHT, "the United States, with an economy of almost $14 trillion, [China's gross domestic product is approx. 3.5 trillion] sent out about $100 billion in tax rebate checks this summer".

But for Dominique Strauss Kahn, this is a good thing: "It will have an influence not only on the world economy in supporting demand but also a lot of influence on the Chinese economy itself, and I think it is good news for correcting imbalances."

And indeed, according to Washington Business Journal, it does have an influence, as the Standard & Poor's 500 Index gained 23 points to 959 and the Dow Jones Industrial Average futures gained 198 points to 9,192.

The question left to answer is how long will this influence last? And what will this economic stimulus plan do for US-China relations, and especially San Francisco - China relations?

Here's the beginning of an answer, courtesy of the San Francisco Chronicle (article from November 12th, 2008) :

"China's $586 billion economic bailout, announced over the weekend, could not have come at a better time for Bay Area business delegations looking to make their mark here.

More money, assuming the Beijing government follows through on what it says, will be pumped into export growth and green tech. And that plays right into the sweet spots of San Francisco's ChinaSF initiative and the Bay Area Council's U.S.-China Green Tech summit. Both groups are in Shanghai this week meeting with the locals, hoping to gin up business in those exact areas."

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