China reiterates glide path

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From BS:

At the conclusion of a three-day meeting on setting economic priorities for next year, China’s top leaders repeated their pledge to press ahead on structural reforms designed to make China’s economic growth more sustainable, such as shutting down highly polluting factories, reducing China’s industrial overcapacity and taking other difficult economic measures.

At the same time, the leadership also stressed again the need to maintain a “prudent” monetary policy as well as a “proactive” fiscal policy, according to a statement by the official Xinhua News Agency. Monetary policy shouldn’t be “too tight or too loose,” according to the statement.

…”A lower GDP target for 2015 is almost certain,” Société Générale Group said in a research note, echoing others.

And Reuters:

The People’s Bank of China is easing enforcement of quotas and loan-to-deposit ratios to encouragebanks to quicken lending as the economy slows, sources with direct knowledge of the matter told Reuters.

Sources said that the central bank had begun loosening official lending quotas in October, and that the regulator has also halted strict enforcement of loan-to-deposit ratios, freeing up additional cash for credit creation.

It also has set a target of 10 trillion yuan ($1.62 trillion) in total loans for 2014, the sources said.

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Glide path maintained.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.