There are some hopes that Chinese stimulus will work wonders. Rio Tinto, for instance, believes that the stimulus will support demand for their iron ore. Chief executive Tom Albanese said in today’searnings announcement:
Although sentiment remains negative in Europe and the US recovery is still fragile, our order books are full and we expect Chinese GDP growth to be around eight per cent in 2012. We expect to see signs of improvements in Chinese economic activity by the end of the year, with growth picking up more strongly as Government stimulus measures announced in the second quarter begin to flow through to infrastructure investment. Around 500 of these investment projects are slated to start later this year and in 2013.
And what they are referring to regarding the stimulus is basically what all those local governments have been announcing over the past 2 or 3 months, many of which remain vague and unconfirmed:
