Qualitative change is necessary

The Chinese government launched a large-scale, multi-layer economic stimulus package late last year in a bid to counter the emerging economic slowdown against the backdrop of the global financial crisis.

The government-dominated economic revival campaign, which consists of a proactive fiscal and moderately loose monetary policy to rejuvenate some crucial industries, as well as an expansive $586-billion stimulus package, has indeed boosted declining consumer and investor confidence, opened up the credit market to fund-hungry enterprises and helped the country achieve commendable growth.

It is understandable that the Chinese government has chosen some unconventional economic and market tools to boost its slowing economy at a time of an exceptional crisis. For instance, the government has tried to reduce overproduction in eastern coastal regions by expanding production in less-developed central and western areas to narrow imbalances in national economic development. However, the economic recovery following an avalanche of stimulus packages is not built on a solid foundation, as President Hu Jintao and Premier Wen Jiabao have pointed out on several occasions, and the fragile domestic market has not regained all its normal functions.