The economic data have on the whole been very encouraging over recent weeks, but this strength has only fuelled market concerns about inflation and the prospect of monetary tightening. These worries will not go away – headline inflation will soon jump again after a likely pause in January. But, further ahead, a key question still needs to be answered: how far has China moved towards rebalancing its economy? The current account surplus fell to 6% of GDP last year from 10% in 2008, but this was not due to a turnaround in domestic consumption. In fact, consumption growth was unchanged. If policy stimulus and the global rebound are not sustained, GDP growth will be much weaker. China is entering the year of the tiger with a roar, but it may exit with a whimper.