Chinese stocks are pushing record lows. The Hang Seng China Enterprises index could be bought for 1.33 times book value on Friday. The last time the finest red-chips were trading that cheaply, almost exactly three years ago, policymakers swung into action with interest rate cuts, a bank-loan binge and Rmb4,000bn of fiscal stimulus. This time, the prospect of a similar package looks remote indeed.

While a cut in the reserve requirement ratio, now at an all-time high of 21.5 per cent, could ease the flow of credit to small and medium-sized enterprises, which account for four-fifths of China’s job creation, the People’s Bank will be disinclined to risk it. In August, consumer price inflation fell a little, to 6.2 per cent. But it remains too high to signal a change in policy direction, while in October 2008 CPI was rapidly tumbling toward zero.

Further, bank lending officers will not be allowed off the leash so soon after the excesses of 2009/2010, when M2 money supply growth averaged almost double the current rate of 13.5 per cent, a seven-year low. Fears of rising non-performing loanshave already savaged bank valuations.