China’s economy is slowing down… but it looks like a moderation rather than a crash or double dip. Central government should not push anymore social and economic responsibilities on local governments. If necessary, China has room to expand fiscal policy rather than monetary policy. Public works and especially social housing can be financed through sovereig bond issuance at low cost to public. We do not expect any reversal in property tightening measures or a lift in 2010credit quota which seems sufficient to cushion any severe slowdown “tight monetary and loose fiscal policies” should be the new slogan