Back in November, nervy policymakers in Beijing threw US$14.6 billion into the laps of the provinces and instructed them to spend it before the end of 2008. This was part one of the central government’s share of the US$586 billion stimulus package. In February, we were told that part two would be even bigger, totaling US$19 billion. And as for part three? The same amount again, state media said last week. Now it is reported that the third injection will be only half that. This is seen as further evidence of the government’s belief that its spending plans are having the desired effect. So are the bigwigs in Beijing being prescient or complacent? It’s difficult to say. Last week the majority of private economists revised their growth projections upwards, citing the expected impact of a splurge in bank lending. But the big caveat is what happens next. Should the government rein in lending or might this undo the good work being done? If it doesn’t curb credit growth, does it risk creating an overcapacity time bomb as the liquidity flows to places where it isn’t really needed? Put simply, Beijing is at that point in the party where another drink is desirable but might make the difference between a productive morning at the desk and a painful morning over the toilet bowl. The banks that serve this, erm, liquidity are in a bit of a bind. Their master says “Pour the drinks,” but their customers may not be able to pay for them. German insurer Allianz and American Express are not sticking around for the morning after at Industrial and Commercial Bank of China. Both are expected to sell off their stakes in the bank as the lock-up periods expire this week, although Goldman Sachs has promised to stay for another year. And there was good news for perennial underachiever Agricultural Bank of China, which saw profit rise 17.5% year-on-year in 2008. The bank’s non-performing loan ratio fell to 4.3% from 19.3%. Let’s hope it stays there.