China Is Starting to Get Serious About Stimulus

If there was any doubt that shoring up the fragile recovery was the primary domestic concern of Xi Jinping, it ought to have been erased by new and consequential steps to buttress the economy. Nor was symbolism neglected: A jaunt across town to the central bank suggests the president wants every part of the powerful state machinery aligned to meet a growth target once criticized for its lack of ambition.

Shifts in fiscal policy aren't often riveting stuff, but the changes unveiled by Beijing on Tuesday are significant. By allowing the deficit to exceed the traditional limit of 3% of gross domestic product, China's legislature green lit a notable boost in spending. Mid-year course-corrections have typically been reserved for calamitous times, such as the peak of the global financial crisis in 2008, the Asian meltdown a decade earlier, and natural disasters. Does that mean lawmakers, who rarely buck the leadership's desires, believe growth is hanging by a thread? Not quite, according to recent data.