On April 26, 2004, the Standing Committee of the Politburo agreed to strengthen contractionary macroeconomic policies dramatically and to apply administrative controls over investment and land use. Within days, the State Development and Reform Commission (SDRC)—the former State Planning Commission—issued an urgent directive ordering the suspension and reinspection of thousands of investment projects. These steps represent a dramatic reorientation of Chinese macroeconomic policy. They have a significant political impact, bringing new leaders into the core of the economic decision-making process and shifting economic policy in a conservative direction. If not an outright step backward, these measures also indicate that economic policy approaches in place through the first year of the administration of Premier Wen Jiabao have failed to achieve their objectives. This piece describes the most important policy measures instituted; traces these measures' political implications, and assesses their economic implications.