Policy makers around the world have long envied China's ability to get big things done. A huge 4 trillion yuan ($612 billion) stimulus plan as the global economy cratered in 2008? No problem. Marshalling banks to lend trillions more? Check. Enacting sweeping regulatory changes at a moment's notice? You bet.
Ah, the good old days. Now, a once-in-a-decade leadership shift is getting in the way of the stimulus-happy policies to which investors became accustomed. The nimbleness that helped China steer around the worst of the global crisis is confronting political paralysis of the kind more often seen in Japan, Europe and the US. The upshot is that China's 7.6 per cent growth rate may fall more in the next 12 months than anyone expects.
It's not that Wen Jiabao doesn't get the extent to which the supposedly unstoppable China has hit a wall. Just as in 2009, the Premier is visiting key industrial cities such as Guangdong and Zhejiang. Wen is facing dour looks from manufacturers surrounded by piles of unsold goods, a rare experience for the main engine of China's economic rise.
Factory warehouses are cluttered with excess stock, store shelves are filled beyond capacity, and dealerships are choked with cars that used to speed from showroom to road. And yet Wen's team in Beijing has been eerily silent about how it plans to revive things. That may be because the short answer is, it doesn't.
One problem is that China has run out of obvious ways to kick-start its $7 trillion economy. It was easy in 2008: pump tens of billions of dollars into a sweeping stimulus project and 10 per cent growth followed. China's success gave markets the impression that its leaders could wave some magic wand and growth would be the result.
Magic is in short supply now. Local governments are cash-strapped and awash in debts that could turn bad. The eurozone seems locked into permanent-crisis mode while the US is bogged down with debt, economic stagnation and political paralysis. China proved it can live for a few years without US and European customers, but not forever.
The bigger topic is politics amid this year's leadership shift. Instead of tackling the issues of growth and economic reform, officials are punting on big decisions.
At one time the weaker links within the Group of Seven nations were supported by the others. Those days are gone and now that China is sputtering, the new reality is upon us and manifesting itself in disturbing ways.
Take Asia's surge of nationalism. Political scientists have loads of theories about why China, Japan and South Korea are suddenly at loggerheads: bad blood over World War II, energy needs, designs on controlling the Asian seas, the power vacuum left as the US focused on two intractable wars. One theory that deserves more attention is how these countries deflect the blame for troubles at home.
In Japan, the Prime Minister, Yoshihiko Noda, is spectacularly unpopular after raising taxes and restarting nuclear reactors that were shut after last year's earthquake. Playing up territorial disputes allows him to change the subject and throw a bone to Japan's influential right-wingers. In Seoul, President Lee Myung-bak has been embarrassed by corruption charges against his family. Fanning popular anger about South Korea's status in Asia has shifted the national dialogue.
The same strategy prevails in China. Headlines focus on the widening gap between rich and poor, the Bo Xilai scandal, and charges that China fudges economic and pollution statistics. Turning public attention to China's former colonisers has been a political winner.
The loser in all this is economic co-operation in Asia. Also on the losing side is vital economic change in China. Over the last decade, Wen and President Hu Jintao produced rapid expansion, but few of the structural reforms China needs for balanced growth in the decades ahead. State-owned enterprises and banks are more dominant than ever, producing huge misallocations of resources and priorities. Meanwhile, no effort has been made to build a market that promotes domestic consumption.
Rather than retool the economy, China is content to rely on the old fast-growth, export-driven model. The trouble is, the Wen-Hu era lulled markets into counting on the constant injections of stimulus spending that gave China a unique, yet unsustainable, foundation. If China isn't a gigantic bubble economy, it's one made up of many smaller bubbles - property, stocks, exports. These are the result of spending-induced growth and imbalances that might breed trouble down the road, including inflation and a bad-loan crisis.
Traders looking for another dose of stimulus are expressing their disappointment that none seems forthcoming. The Shanghai Composite Index is down 13 per cent so far this quarter. Those declines may accelerate as China's leadership transition distracts lame-duck officials from giving markets their fix. The same goes for a world economy more devoid of growth engines than ever.