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China’s U-Turn

BEIJING – Hope and danger collided at the recently concluded National People’s Congress in Beijing. The two-week conclave meets annually, and while it is unfair and inaccurate to characterize the Congress as a rubber-stamp exercise, delegates tend, in the main, to jump on the bandwagon of policies constructed by the central government, and by the Communist Party. 

The hope was that the Chinese leadership would finally do something – preferably something bold – to forestall further decline in the country’s major economic indicators. Growth has slowed, exports have plummeted, and unemployment has jumped, and the prevailing view has been that a “blame America first” strategy makes the most sense. Analysts kept waiting for Chinese officials to salvage capitalism by spelling out a plan to save its economy first.

The danger is that this is exactly what China’s leaders did.

China’s government is divided on a number of matters, but there is a strong, sharp-edged consensus that social stability is at risk unless a robust stimulus package emerges to stave off further job loss. (Never mind that Chinese history lacks evidence of a clear, causal connection between unemployment and national unrest.) Premier Wen Jiabao confirmed that a major effort was being made to extend and implement the previously announced four-trillion-yuan plan, and that more funds were available if conditions worsened.