Chinese officials have been at pains in recent months to disassociate their economic policies from the effects of the crisis gripping other parts of East Asia. They have insisted that Beijing is following its own path, and is not to be swayed by pressure from elsewhere. The most notable example of this has been the resolution with which devaluation has been ruled out, to general relief elsewhere in Asia and in the West.
But, with its economy now meshed in with the international trading system, it is hardly realistic to imagine that the policy makers who are framing China's course into the next century under Zhu Rongji's premiership can ignore what is happening elsewhere. So it was all to the good that the head of the People's Bank should have recognised publicly yesterday the likelihood of a substantial fall in inward investment and export earnings given the importance of the rest of Asia for both.
Though Governor Dai Xianglong still predicted a continuing trade surplus and an increase in reserves, the prospect is that Beijing is going to have to gear up domestic demand and spending if it is to achieve its growth targets. The cost of falling significantly below those targets could be enormous, and the streamlining of the bureaucracy announced at the National People's Congress during the week is an essential weapon on achieving the more efficient economic performance on which Mr Zhu has set his sights. But the impact of that may take time, so Beijing is right to turn to infrastructure spending as a way of pumping up growth. But growth is not simply a matter of economics; it is also central to the political position of the leadership. The expected changes in personnel at the top of ministries in the coming days will mean a new cast below President Jiang Zemin and Mr Zhu facing their own set of challenges in a new international environment.
The inevitable decline in exports - not only in areas like toys and textiles but also in machinery and more advanced goods - means that China is going to have to act increasingly as its own motor for development so long as it holds its currency firm and refuses the facile but deeply dangerous path of competitive devaluation. From what is emerging from the NPC, that appears to have been accepted in Beijing, which must be a source of relief not only for the rest of Asia but particularly for Hong Kong.