Much more than a cyclical adjustment, Beijing’s latest policy shift marks a milestone in the history of its economic management.

Beijing’s larger-than-expected market rescue plan announced last week is extraordinary in every way. The policies, from interest rate cuts to special funding schemes for the stock market, are significant. But investors are particularly excited about a shift in policymaking that may have removed certain self-imposed constraints in dealing with the economy and stock market.

Before the shift, a big concern regarding China’s economic prospects was whether Beijing was serious in putting growth at the top of its agenda. There were fears among investors that development may have lost significance to security and order.

Beijing sometimes looked indifferent when market participants pleaded for support. As late as the Politburo meeting on July 30, when deflationary pressure was obvious and Beijing’s own growth target was at risk, China’s leaders still vowed to keep “strategic focus” and a “prudent” monetary stance, implying that they were not in the mood for........

© Pearls and Irritations