Contrary to widespread concerns over an imminent hard landing, China will defy the naysayers. Even after premier Wen Jiabao’s latest warning over a moderate slowing of growth, it is doing a far better job managing its economy than most give it credit for. It even offers lessons in macro policy strategy that the rest of the world should heed.

Nowhere is that more evident than on the inflation front, where Chinese authorities have waged a successful campaign against what has long been the nation’s most destabilising economic threat. After peaking at 6.5 per cent in July 2011, the headline consumer price index has decelerated to 4.5 per cent in early 2012, with more disinflation likely in the coming months.

This reflects the effects of three deliberate policy actions taken by Beijing.