What will the economy be like next year

China's leaders will gather in Beijing shortly to discuss priorities for 2015. They use the year-end Economic Work Conference to set out priorities for the year ahead.

Fiscal policy has been "proactive" in 11 of the last 15 years, including in the past few years in which the (cyclically adjusted) fiscal deficit was first reduced and then rebounded. And monetary policy has been "prudent" since 2011 and will probably remain that way in 2015.

The People's Bank of China recently cut benchmark interest rates and we (at Capital Economics) expect further cuts next year. But changes in policy and in how policy is described don't go hand in hand. For example, the shift from "prudent" to "tight" policy at the end of 2007 only happened when the tightening cycle had almost come to an end.