ANALYSIS - A year on, China's stimulus postpones its problems

By Alan Wheatley, China Economics Editor

BEIJING (Reuters) - Exactly a year since it unveiled a 4 trillion yuan ($586 billion) stimulus package and switched to an easy monetary policy, China is basking in the success of its aggressive response to the global financial crisis.

The government's 8 percent growth target for the year -- derided by some prominent economists as fanciful well into 2009 -- is in the bag. And the solid consensus is that growth will be stronger, possibly a lot stronger, in 2010, when China is set to overtake Japan as the world's second-largest economy.

China is contributing more to global growth than either the United States, the euro zone or Japan and its surging imports have limited the slide in global trade, according to the World Bank.

"There's an inexorable shift towards East Asia, particularly towards China," said Vikram Nehru, the bank's chief economist for the region. "China is becoming a central part of the global economy."

China, in short, is riding high. But could it also be riding for a fall?

After all, the imbalances at the heart of China's mode of development -- too much investment, too high savings, too little consumption -- seem to fit the dictum of late American economist Herbert Stein to a T.

"If something cannot go on forever, it will stop," Stein's Law says. Exhibit one: the prolonged U.S. credit binge that begat the crisis.