Financial China

Stealth tightening

  • Published 06 Aug 2009

Although the official "appropriately loose" monetary policy remains unchanged, Beijing is in fact determined to delicately but firmly restore some discipline

China's economic policymakers are walking a tightrope. If credit is kept too easy for too long, a big bubble could inflate. But if Beijing puts its foot on the monetary brakes too hard and too early, it could sacrifice this year's economic rebound. Fears of such an outcome were present in the Shanghai stock market's 5% retreat on July 29.

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