Policymakers taking stock as hard landing fears ease

Policymakers in China have good reason to be pleased about the state of the economy at the half-way point of 2014. Their decision to tweak policy rather than opt for broad stimulus appears to have been vindicated, with recent data suggesting that growth is stabilising. The forthcoming Q2 employment data deserve as close attention as the GDP figures, but most available evidence so far suggests the labour market remains healthy. Officials have room to be more aggressive if the property downturn turns into a slump. For now though, the focus will remain on fine-tuning.