Mainland provincial and city leaders have laid out ambitious spending plans, reigniting speculation that a stimulus package similar to the programme launched during the 2008 global recession may be on the way.
But analysts caution against expectations of a 'Big Bang' stimulus and say the 2012 story is likely to be less exciting than that in 2008 as banks have become more prudent about evaluating risks linked to local borrowings, and sagging land sales will continue to limit the capacity of local authorities to spend heavily.
'We expect further policy easing and additional stimulus measures, but no 'Big Bang' stimulus packages,' said Bank of America Merrill Lynch economists led by Lu Ting.
Echoing these cautions, UBS Securities economist Wang Tao said: 'We would not be holding our breath for another big stimulus.'
The 'regional stimuli' outlined by governments from Changsha in the central Hunan province to Guizhou in the southwest were largely wishful thinking, said Wang. 'Banks have been more cautious this time.'
In addition, the central government's insistence on not relaxing its property policies has limited the ability of local leaders to use land or property to finance ambitious investment projects, she added.