You can almost hear the popping of champagne corks. In recent months, growth of China's real fixed investment, industrial value added, broad monetary aggregates and bank lending all slowed from the breakneck pace of last year and the first quarter. But the growth of private consumption increased, so second-quarter gross domestic product growth was only a little below the figure for the first quarter and somewhat higher than growth for 2003 as a whole. Many observers have thus concluded that China's desired "soft landing" is imminent.

Based on China's experience in the unwinding of the last investment boom, we say: not so fast.