CHINA

Let's be honest: the US Stimulus plan did nothing. It might have even worsened the economic downturn that first hit our nation in 2008. Small government is starting to look more inviting. Yet there are still dissenters, claiming that "the spending was a good idea, it was just allocated wrong." Or "it wasn't enough, a much larger amount was needed to make any real progress." Then there are the China-groupies. China has by all accounts done much better than the US during the current global economic crisis. After suffering a relatively bad fourth quarter in 2008, China rebounded and recorded 9.2% growth in 2009. This growth has continued until relatively recently. It was the result of a 586 billion (4 trillion yuan) stimulus package passed by Chinese government in late 2008 - early 2009. But this stimulus was not without its adherent risks. It created inflation, a housing bubble, and bad debts. The effects of these problems are only now being felt. In the last quarter of 2011 China's GDP growth slowed to 8.9%. JP Morgan predicts it will fall to 7.2% in the first quarter of 2012. Barry Eichengreen of the University of California at Berkeley, Donghyun Park of the Asian Development Bank and Kwanho Shin of Korea University have predicted that China's growth will slow by at two percentage points a year starting in 2015. This is largely due to inflation, the soon-to-burst housing bubble, and China's increasing debt. Still, compared to other recession-hit nations China is doing very well. Some of these numbers would be the envy of debt-laden countries such as Greece and Italy. Does this mean the Chinese stimulus was a success? I don't think so. It may have staved off immediate calamity in 2008 but it has created problems of its own (enumerated above). These problems are not likely to go away soon and will probably continue to haunt China for years to come. Only time will tell, but the fate of the "Asian Tiger" will provide serious fodder for the debate of big verse small government, of Thatcherism vs. Obamanomics.
Sources: http://online.wsj.com/article/SB10001424052970204555904577165593145006650.html
http://blogs.wsj.com/chinarealtime/2012/01/17/developer-battle-in-shanghai-foreshadowing-fights-to-come/