CHINA In the world’s second- and third-biggest economies, the helpful hand of government could hardly be more visible. In Japan, where economic output shrank 3.8 per cent in the first quarter, government spending is about the only item on the rise: public works contracts rose 21 per cent year on year in April. China, which unveiled stronger fixed asset investment data than expected Thursday, tells a similar tale.
Central government lifted investment 28 per cent year on year in the first five months of this 2009; local governments and state entities raised the bar higher. Targeted subsidies are rekindling some areas of consumption.
