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Bill Catlin

St. Paul, Minn.

November 11, 2008 7:12 AM

Iron Range sees hope in Chinese stimulus plan

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Minnesota's Iron Range may see a benefit from China's huge stimulus plan announced on Sunday.

China said it would spend nearly $590 billion over the next two years on housing, electricity, water, infrastructure and other needs.

The announcement comes amid slumping demand for steel that's threatening jobs in Minnesota's taconite industry.

Tony Barrett, Professor of Economics at the College of St. Scholastica in Duluth, said China's plan will help put a floor under steel prices.

"This is definitely good news. I mean whether it's going to be enough to offset the decline in the rest of the world, the U.S. economy in particular, remains to be seen. But it's a major step in the right direction," Barrett said.

Barrett said the size of the stimulus is comparable to $2 trillion of government spending on the U.S. economy.

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