As new leaders from Communist Party urged to actively promote urbanization, Asian stocks have advanced with the regional benchmark index moving towards highest close in last seven months. The move is expected to significantly boost earnings of people from cities and significantly support the urbanization cycle. Amid policy announcement, with increased hopes, The Shanghai Composite Index has inclined 3 percent, highest since September. With increased market optimism and positive market sentiments, the market share price of blue chip companies also have surged up to 4.6 percent.

Market analysts and economists have started to project positive economic indicators in line with announcement of urbanization policy as the program is believed to increase market liquidity combined with increased infrastructure spending. Policy makers have also highlighted on ‘multiplier effect’ of the urbanization measure which shall definitely kick off with increase in public as well as private (household and investment) sector.

With the theme of ‘policy continuity and stability,’ the government is committed to materialize the macroeconomic policies stability as well as flexibility, i.e., to deal with contingent or difficult situations. The principle of continuity and stability is expected to not only boost Chinese internal/domestic economy, but, support the economy to tackle external challenges. For better outcomes, though, fiscal and urbanization reforms are obviously mandatory, opine economists.

Despite China endeavoring to avoid the economic pessimism, looming fear of fiscal cliff, i.e., rise in tax and spending cuts that could trigger more than USD 600 billion in US, has been continuously threatening the Chinese economy indeed. It is understood that if US couldn’t avoid the much feared fiscal cliff, it would not only dampen itself, but shall contract the entire global economy, Chinese the most. For the time being, assuming other factors, i.e., other economies constant, with Gross Domestic Product (GDP) growth rate of 7.4 percent on year-on-year basis, China is not only heading to acquire silver linings on its wings but eventually contributing towards global recovery with its sole efforts in terms of economic policies and reforms.

It is time which will depict whether the Chinese economy would be able to sustain the global economy with its continued efforts or would itself be dragged towards global economic recession.