China is considering an economic stimulus package of up to 400 billion yuan (58.4 billion dollars) to boost growth, an economist said as hopes of such steps ignited a stock market surge Wednesday.
"The top leadership is carefully considering an economic stimulus package of at least 200 billion yuan to 400 billion yuan, or one percent to 1.5 percent of gross domestic product," JPMorgan Chase economist Frank Gong said in a note.
The Hong Kong-based researcher said this was in addition to the 500 to 600 billion yuan expected to be spent on reconstructing parts of southwest China's Sichuan province, which was hit by a devastating earthquake in May.
Gong did not cite any source for his information on the possible stimulus package. He was not available for comment when contacted by AFP on Wednesday.
The measures would include tax cuts, moves to stabilise the Chinese stock market and efforts to support the development of the housing market, Gong said in the research note.
Economic growth in China slowed to 10.4 percent in the first half of 2008 from 11.9 percent for all of last year. There are concerns that weakening export growth due to the global slowdown could further hit the Chinese economy.
But hopes that Beijing will step in to support growth and shore up the stock market, which has plunged more than 50 percent since a peak last October, sparked a 7.63-percent surge in the volatile Shanghai bourse on Wednesday.
