China's economy becomes simply too big to fail

Number one The Chinese economy is, on some metrics, about to become the world's largest. But optimism has to be offset against some worrying indicators.

Treasurer Joe Hockey channeled Sir Humphrey Appleby when, releasing the National Commission of Audit report, he described some of its recommendations as "courageous".It was a gentle way of saying that the Abbott government would not take the political risks involved in following some of the advice outlined in the report.

Hockey's whimsicality struck an altogether different note than remarks last week by China's Premier Li Keqiang. Mr Li said the Chinese government would steer clear of short-term stimulus measures. Pushing deeper economic reforms was "wiser and more courageous" than relying on government spending and borrowing to produce growth.

The previous day the International Comparison Program (ICP), hosted by the World Bank, revealed that China would displace the United States as the world's largest economy as early as this year.

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