The China Leadership Monitor seeks to inform the American foreign policy community about current trends in China's leadership politics and in its foreign and domestic policies.

The Monitor proceeds on the premise that as China's importance in international affairs grows, American policy-makers and the broader policy-interested public increasingly need analysis of politics among China's leadership that is accurate, comprehensive, systematic, current, and relevant to major areas of interest to the United States.

China Leadership Monitor analysis rests heavily on traditional China-watching methods of interpreting information in China's state-controlled media. Use of these methods was once universal among specialists in contemporary Chinese affairs.

Although the use of these methods has declined as opportunities to study China using other approaches have opened up in recent decades, their value in following politics among China's top leadership has not. Monitor analysis also brings to bear some of the new avenues of information and insight that have opened up since the normalization of U.S.-China relations and China's policy "opening to the outside world" in the late 1970s.

The China Leadership Monitor website is updated with new analyses quarterly.

Read The China Leadership Monitor, Spring 2009 Online

Read China Leadership Monitor, Spring 2009 online, or you can download China Leadership Monitor, Spring 2009 in PDF format.

CONTENTS
PRC-Taiwan-United States — Alan D. Romberg
First the Easy, Now the Hard
Military Affairs — James Mulvenon
Hu Jintao and the “Core Values of Military Personnel”
Economic Policy — Barry Naughton 
Understanding the Chinese Stimulus Package
Political Reform — Joseph Fewsmith
Social Order in the Wake of Economic Crisis
Party Affairs — Alice L. Miller
Leadership Presses Party Unity in Time of Economic Stress
The Provinces — Cheng Li
Reclaiming the “Head of the Dragon”: Shanghai as China’s Center for International Finance and Shipping

Understanding the Chinese Stimulus Package
Barry Naughton

Shocked by the speed and depth of the economic downturn in 2008, the Chinese government responded vigorously with a very large stimulus package. The Chinese leadership has continued to modify the program, adding initiatives and layers of complexity, while sticking to the original headline numbers. The overall stimulus program can be broken down into three interrelated components: an investment plan, a set of funding mechanisms, and a series of industrial policies. Together, these initiatives make up a large, activist intervention in the Chinese economy that will shape the trajectory of Chinese development for a decade or more.

The current economic situation in China is one of unprecedented complexity. China was experiencing a domestic slowdown when it got hammered by the global financial crisis in the fourth quarter of 2008. The Chinese policy response since that time has been extraordinarily vigorous. The initial response has been followed by successive innovations and adjustments to policy, while retaining an activist stance.

The economy has been tugged in opposite directions by competing forces of economic recession and government stimulus. For example, although the slowdown in the economy had been evident since at least July 2008, actual export shipments did not drop dramatically until January 2009. Thus, through February, policymakers were dealing with what seemed to be a continuously deteriorating environment. ...

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