China’s stock market was plunging and its currency was teetering. The head of the central bank, fielding questions at a rare news conference, said that China would make it easier to get home mortgages.It was February 2016 and Zhou Xiaochuan, the central bank’s longtime governor at the time, announced what proved to be the start of an extraordinary blitz of lending by China’s immense banking system.Minimum down payments for buying apartments were reduced, triggering a surge in construction. Vast sums were also lent to local governments, allowing them to splurge on new roads and rail lines. For China, it was a familiar response to economic trouble. Within months, growth started to pick up and financial markets stabilized.Today, as China faces another period of deep economic uncertainty, policymakers are drawing on elements of its crisis playbook, but with little sign of the same results. It …
