If we review the economic development in China and the changes in the macro-regulation over the past ten year, we can easily identify the following characteristics: -

(i)there were significant changes to the policy thinking on macro-regulation;

(ii)the transition was highly intense; and

(iii)the economic fluctuations were large.

ANBOUND's research team is of the view that a correct understanding on the underlying trend is one part of making a right decision but for now, the economic decision makers in China must stick to the new thinking and get rid of the previous measures of strong stimulus, large-scale regulation and huge fluctuations instead of going back and forth on their policy direction.

The essence of macro-regulation is fine-tuning and prudence is the best development model.