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As Economy Slows, China Eases Monetary Policy
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| Contributor | ArmyDem |
| Last Edited | ArmyDem Sep 15, 2008 08:59am |
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| Category | News |
| Media | Newspaper - New York Times |
| News Date | Monday, September 15, 2008 02:00:00 PM UTC0:0 |
| Description | By KEITH BRADSHER
Published: September 15, 2008
HONG KONG — After five years of tightening monetary policy to fight inflation, China abruptly reversed course Monday, cutting interest rates and easing bank lending restrictions in response to signs that growth in the Chinese economy was slowing.
China’s restrictions on large movements of money in and out of the country and its immense reserves of foreign currency have insulated its financial markets from the troubles shaking Wall Street. But this has not been enough to protect China from a global economic downturn.
China’s exports have slowed sharply, particularly when adjusted for inflation and expressed in China’s currency. Real estate prices are weakening, particularly in coastal cities that depend on exports, and China’s stock market has lost three-fifths of its value since October.
Since 2003, China’s top economic priority has been to control inflation. But China’s Politburo, the country’s highest decision-making body, decided at a meeting on July 25 that the top economic goals should shift to sustaining economic development and limiting inflation, in that order.
The People’s Bank of China, the country’s central bank, echoed the Politburo on Monday in announcing the new direction of monetary policy. |
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