This time last year, when the global economy seemed to be in freefall, Wen Jiabao, the Chinese premier, described 2009 as the most “difficult” year China had faced in a decade. This year he says the conditions are the most “complicated”.
Near the top of Mr Wen's list of challenges is how to exit from the massive monetary stimulus that China engineered last year, which saw credit expand by 30 per cent while the economy grew 7 per cent in nominal terms. Mr Wen needs to move soon to prevent inflation from taking off but not so hastily that the economy slumps again.
The situation is complicated for Chinese policymakers by record levels of bank deposits. For the past few weeks, global markets have focused intently on the amount of new credit that Chinese banks are issuing, looking for signals on potential tightening.