China did not just dodge the worst of the financial crisis. It galloped right through it. It did that largely by pressing its banks into national service. But if it wants to keep cantering for at least another year, without the hard landing that it avoided in 2010, structural changes are needed. Better pricing of credit, and a better grip on inflationary forces, are two of the most urgent.

Both could be addressed with a single move: by devolving more power to the central bank. At the moment, the People’s Bank of China is one of 27 ministries and agencies under the direction of the State Council, on a par with culture, supervision and family planning. Much of the influence over monetary settings lies not with Zhou Xiaochuan, PBoC governor, but with Zhang Ping, head of the National Development and Reform Commission, the offspring of the once-omnipotent State Planning Commission, which still has the whip hand over macroeconomic policy. The result is that, in its various remedies for inflation, China has emphasised the amount, rather than the price, of credit.

Quantitative measures can only go so far. After six rises in 2010, the reserve requirement ratio, for example – currently at 18.5 per cent for big banks – is fast approaching its theoretical cap of 25 per cent (the banking regulator’s loan-to-deposit requirement is 75 per cent). And while planned credit growth of 15 per cent in 2011 may be enough of a deceleration to keep prices in check, China should not count on it: a much steeper decline from 32 per cent in 2009 to 19 per cent in 2010 is apparently failing to do so. Mr Zhou periodically expresses support for more “market-determined” interest rates, to improve the allocation of resources. Christmas day’s rate rise could be a sign that Mr Zhang is listening, as he should be.