Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

Ever watchful for signs of domestic social unrest, Beijing knew that it had to react. Already on November 5 the State Council convened an emergency meeting to agree on a 4 trillion yuan ($586 billion) spending program. This amounted to a remarkable 12.5 percent of 2008 GDP. It was supplemental to existing investment plans and was to be disbursed by the end of 2010. It was the first truly large-scale fiscal response to the crisis worldwide. On Sunday, November 9, 2008, as the plan was revealed to the press, the State Council declared: “Over the past two months, the global financial crisis has been intensifying daily. . . . In expanding investment, we must be fast and heavy-handed.”12 And the declaration by the State Council was given additional force by a party instruction, Central Document No. 18, which called for a “package plan to counter the global financial crisis.” The word used to refer to the crisis-fighting measures was the old Mao-era term jihua, or plan, rather than the newfangled word for softer government programs or initiatives, guihua, which had come into widespread currency since 2006.13 Instructions to the press required reporting to “stay upbeat, to avoid panic and contribute to consumer confidence.”