ASSESSMENTS
China Renews Its Easing Efforts
Dec 3, 2011 | 15:20 GMT
MARK RALSTON/AFP/Getty Images
Summary
The People's Bank of China announced Nov. 30 that it would reduce the reserve requirement ratio for its commercial banks effective Dec. 5. The announcement comes days before the Central Economic Working Conference, which will set the direction of China's economic policy over the next year. As it moves forward with its easing policy in response to the global economic outlook, Beijing will seek to avoid replicating the problems of the previous stimulus cycle in 2008-09 and to maintain social stability ahead of the 2012 leadership transition. However, with the overabundance of liquidity at levels similar to those seen in 2008-09, any potential easing of credit could be particularly dangerous.
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