China revamps stimulus playbook for growth

Beijing

A BOOM in the financial sector - spurred by a parabolic rise in share turnover - helped China's economy grow by 7 per cent in the first half of 2015, according to official figures. But the financial sector's unsustainable contribution to growth means that Chinese policymakers need an additional segment to pick up the slack if they're to continue meeting economic targets.

The avenue Beijing has chosen to build upon is a familiar one: infrastructure investment. China embarked upon a massive infrastructure spending programme from 2009 to 2012, which had the effects of "lifting economic growth in the short run but also creating a local government debt legacy that threatens financial stability even now", according to Dong Tao, Credit Suisse chief regional economist for Asia (outside Japan).