There are several reasons not to write off Chinese equities just yet, despite this month’s sharp correction and a structural economic downturn. But banking on Beijing’s Rmb2tn local government debt swap to work monetary magic is not one of them.

The swap is a sensible piece of financial engineering. By transforming expensive short-term loans into cheaper bonds with longer maturities, China is reducing the threat that its rapid accumulation of debt poses to financial stability and the economy. By Lombard Street Research estimates, China’s non-financial debt had jumped to 240 per cent of GDP by 2014 from around 150 per cent in 2008.

But the idea in some quarters that the operation is akin to the quantitative easing programmes pursued by other central banks is wide of the mark. Anyone lured by the talk of QE into expecting the debt restructuring to provide a fillip to growth will be sorely disappointed.