Long-term policy reflects responsible leadership

Since spring 2014, Chinese President Xi Jinping has stressed that China must adapt to an economic new normal. In the short-term, that means slower growth, painful restructuring and conflicting responses following fiscal accommodation.

At the 2015 Central Economic Work Conference, the policy authorities pledged to focus increasingly on supply-side reforms, which prioritized the reduction of excess capacity while maintaining stability. That is likely to mean expanded fiscal spending and further monetary easing. As an effort to stimulate economic growth, the supply-side reforms represent the other side of the new normal.

In the foreseeable future, China will emulate neither the laissez-faire doctrines of the United States, which led to the global crisis, nor Europe's social accommodation, which is no longer supported by the region's growth.