Effects of Chinese Economic Stimulus Package on Economic Growth in the Post‐Crisis China

Abstract

This paper aims to simulate the contribution of investment expansion policy after financial crisis as well as describe the possible economic perspectives in the post‐crisis period by using scenario simulation method based on Chinese dynamic economic CGE (computable general equilibrium) model. Energy consumption and CO 2 emission are also considered in order to access the possible negative effects owing to investment enlargement. The results show that expanding investment response to financial crisis increases economic growth rate by 6.74% from 2.36% in 2009. It can relieve the fluctuation in economy and bring the economic growth close to baseline level in the near post‐crisis period. However, higher energy consumption intensity and CO 2 emission intensity compared to baseline owing to the increasing investment make energy saving and CO 2 mitigation more difficult.