On the eve of the G20 meeting, the received wisdom is that China has responded more forcefully to the global crisis than most others. The government budget has indeed turned sharply into deficit, but this is only because revenue growth has collapsed. On the government’s own projections, overall spending growth will be slower this year than last, which implies that any extra boost from stimulus projects will be offset by slower spending growth elsewhere. Stimulus from the broader state sector is stronger, supported by a surge in loans to state-owned firms. But, in most years, profits rather than bank loans have been the main source of financing for investment, and with profits now in steep decline, total nominal investment is still likely to weaken.