China, the world's second largest economy by purchasing power parity, contributed over 10% to global economic output in 2007 and 2008 and is thus a key part of any recovery of the global economy. China faced a severe deceleration of growth in the second half of 2008 based on a number of indicators: GDP, production of electricity, the Purchasing Managers' Index (PMI), weakness of auto sales, a fall in residential home sales, manufacturing data and falling imports and exports. In fact, calculated on a quarter-by-quarter basis like most other countries, Chinese growth (which is reported only on a year-on-year basis) was practically zero and even negative by some private sector estimates.

However, there are greater signs of economic recovery in March from the depths of the fourth...