After a run of bad data, many are now looking at prospects for 2012 with a sense of foreboding. GDP growth in Q4 may have dropped below 7% q/q in annualised terms. Monetary conditions have loosened a little in the wake of China’s policy shift but there has not yet been the rebound in lending that will probably be needed for growth to recover. Despite this, we remain optimistic that policy stimulus will ultimately allow China’s economy to grow faster than many now expect in 2012.