They did this in the run-up to the crash, too. And were blamed for it then. Article contains a distressing picture of China’s real estate market from one of Chiona’s chief economists, which would pour some cold water on hopes that China’s stimulus program can create, rather quickly, demand on the scale required to put a serious dent in trade and currency imbalances. From The Financial Times:
Beijing to tighten controls on credit
By Kathrin Hille and Jamil Anderlini in Beijing
Published: April 12 2009 16:43
China’s central bank on Sunday warned it planned to “strictly control” credit to some sectors of the economy after the country recorded a record surge in bank loans and money supply in March.
The central bank’s statement, made after a routine quarterly monetary policy meeting, followed the release on Saturday of the money supply data. The data appeared to confirm that Beijing’s stimulus measures are revitalising the domestic economy but raised credit risk and inflation concerns.
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