This paper examines the success of China's stimulus spending during the global financial crisis and the changes that need to be made for future economic prosperity. 

As in all the other major economies, China's macroeconomic policy framework was put to the test during the global financial crisis.  China applied one of the world's largest stimulus packages.  The package provided a very rapid boost to activity in the Chinese economy, with empirical evidence suggesting the package added around 2-3 per cent to the level of GDP in both 2009 and 2010.  The stimulus package was clearly a success for China, but there are challeneges in unwinding the effects of the stimulus and addressing structural imbalances.  Pressures to rebalance Chinese growth and integrate China further into global capital markets will necessitate changes in China's macroeconomic policy framework.