Beijing is preparing to step on the brakes – Chinese style. The eye-popping 10 per cent annualised growth in first quarter gross domestic product came on the back of surging liquidity. Banks lent $137bn in the first quarter, about half the amount targeted for the whole year.

Monetary tightening is overdue. The US Federal Reserve has hiked rates 15 times since June 2004; the People’s Bank of China has moved once. Instead, China has opted for administrative measures and is likely to do so again. Possible actions include stricter bank reserve and lending rules and limiting land supply. Unfortunately, these have a mixed track record. Last time Beijing squeezed land supply, in 2004, fixed asset investment barely slowed.