China is not going to spend CNY4 trillion (USD630 billion) to stimulate its economy this time around, at least not yet, or not all in one shot. For one thing, the current mess at this point still hasn’t approximated what came down in 2008-09, a period known in Australia as the Great Financial Crisis.

But political pressures make it a nearly a lead-pipe cinch that Communist Party of China higher-ups will make something happen to boost the Middle Kingdom’s domestic commerce, in an effort to pacify a potentially restless population as well as to retain their respective holds on the levers of power and the wealth these afford them.

Look no further than the benighted periphery of Europe, including Spain and Greece, for real-time, real-world evidence in support of this conclusion.

On the Iberian Penisula “tens of thousands” are taking to the streets to protest austerity measures that have left Spaniards wondering what’s next in a country where the unemployment rate is 24 percent, retail sales dropped 10 percent in April, and an ever larger share of public finances are being eaten up by interest payments–which are slated to go higher, based on recent action for existing 10-year government bonds–rather than paying public employees or funding health care and education.

Voters in Greece have already demonstrated their dissatisfaction with austerity, as no government was formed in the aftermath of May 6 legislative elections and the Jun. 17 follow-up promises, as yet, nothing but more controversy and a potential destabilizing exit from the eurozone. The center-right, pro-euro New Democracy party and the radical-leftist, anti-austerity Syriza party have both led recent polls, with socialist, pro-euro Pasok in third.

China’s once-a-decade leadership transition, which will likely commence in October, is a big specter here. Already this process has exposed what David Ignatius of The Washington Post has described as “the greatest internal crisis since the Tiananmen Square protests of 1989,” the purge of regional party leader Bo Xilai. Mr. Bo, under investigation for corruption, had many friends among the party and in military circles who feel they may be next to go.

Beginning with the 18th National Congress of the Communist Party of China, which is likely to occur in October or November, an estimated 70 percent of members of China’s top political institutions are expected to step down by the time the transition ends with the March 2013 National’s People Congress.

President Hu Jintao and Premier Wen Jiabao will leave the Politburo Standing Committee (PSC) this fall. Speculation has centered on Xi Jinping as Mr. Hu’s successor and Li Keqiang as Mr. Wen’s, handoffs that will take place during the March 2013 National People’s Congress. Mr. Xi and Mr. Li are likely to be the only two holdover members of the PSC.

If previously implemented retirement policies are followed, no other current members of the PSC will continue to serve in that capacity. About 70 percent of the seats on the Central Military Commission and the executive committee of the State Council will also change hands, resulting in the most significant leadership transition in decades.

Officials on the Mainland want this process to go smoothly. The statement released after the December 2011 Central Economic Work Conference in Beijing defined the main theme 2012 economic and social development as “making progress while maintaining stability.”

“Stability means to maintain basically steady macroeconomic policy, relatively fast economic growth, stable consumer prices and social stability,” the statement said. In a story detailing the conference the official Xinhua News Agency noted, “Stability is needed not only in economy, but also in society. The measures taken to promote economy are also the ones to improve people’s livelihood.”

Mr. Ignatius of the Post spoke to Brookings Institution Senior Fellow Kenneth Lieberthal–and “perhaps America’s most respected Sinologist”–in connection with the story linked to above. Mr. Lieberthal noted the following factors that make this period so dicey for China:

The Chinese leadership is rarely so clearly divided. The party rulers prize consensus and believe that it’s a key factor in maintaining stability. They learned long ago the lesson that if they don’t hang together, they risk all hanging separately. That essential consensus is now in question.

The Chinese middle class, whose rise has buttressed political stability, appears disgruntled. Social media in China are alive with complaints about product safety, food safety, air quality (described by U.S. officials as “crazy bad”) and widespread corruption. A crucial social force is increasingly disaffected, and the spread of new social media amplifies this discontent.

The Chinese elite worry about a huge migrant labor force, estimated at 300 million, who mostly live on the margins of the rich coastal cities. They represent a potential source of instability because they are denied full urban status, with its attendant benefits. If there’s one thing China is good at, it’s managing and suppressing internal dissent, so you’d have to bet that Beijing will keep the lid on. But it’s getting harder.

As Esward Prasad, former head of the IMF’s China division and currently a professor at Cornell University, noted in the Financial Times May 21:

China has adequate room on the fiscal policy front. The level of public debt, estimated by the IMF to be about 25 per cent of gross domestic product, is low by international standards and the government budget was close to balance in 2011. No doubt local government debts and contingent liabilities in the banking system–loans that could turn sour if growth slows–might mean a higher implicit public debt burden. But many of those contingent liabilities will not turn into real liabilities unless growth slows sharply.

A research note by Credit Suisse economist Dong Tao pegged a potential stimulus package at between CNY1 trillion to CNY2 trillion (USD158 billion to USD316 billion)–The Australian Business Briefing floated “300 billion” as a fixed fact early this week, before Xinhua News Agency published walk-backs by officials–well south of the CNY4 trillion China spent to dig it and the world out of the GFC.

Lu Ting, an economist at Bank of America-Merrill Lynch, forecast an even smaller number but noted China wouldn’t need much stimulus unless Greece left the eurozone in a manner that sets off “a fresh, full-blown crisis.”

China has already unveiled subsidies for purchases of household appliances, hinted at tax changes to reduce business costs and pledged to let more private capital in some previously restricted areas. On Wednesday the government said it will channel support to seven industries, including new energy and environmental protection.

Officials actually may have been acting to mitigate a potentially destabilizing downturn before Mr. Wen said in mid-May that Beijing was prepared to adopt a more proactive fiscal policy to maintain growth.

Between January and April the National Development and Reform Commission (NDRC), the state planning agency, approved 868 investment projects, up from 363 a year earlier, according to public notices posted on its website. In April the NDRC approved 254 projects, up from 213 in March and more than three times the 74 projects approved in April 2011. Approved projects include everything from new steel mills to hospitals and water treatment plants. Clean energy projects, including wind, solar and hydroelectric power, accounted for more than 70 percent of April’s approvals.

And on May 11 the People’s Bank of China announced a third reduction in the amount of cash banks must set aside as reserves in six months, pumping money into the financial system to support lending. Reserve ratios were cut by 50 basis points effective May 18. The level for the nation’s largest lenders will decline to 20 percent based on previous statements.

Xinhua News Agency noted this week that a new round of stimulus won’t be as aggressive as that which jolted global markets from near death in 2008-09. The scale and direction of the measures are “noticeably different” from the spending that followed the 2008 crisis, it added, but there’s something happening here.

It’s an effort to maintain stability, and it should benefit Australia.