Sino-US relationship
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China’s Monetary Sterilization
Exit from comment view mode. Click to hide this space Comments View/Create comment on this paragraph BEIJING – Not long after the United States Federal Reserve Board announced its second round of “quantitative easing” (known as QE2), the People’s Bank of China (PBC), China’s central bank, announced two increases of 0.5 percentage points in the required reserve ratio (RRR) of bank deposits.
Overview of PBoC Instruments
As a seminar focusing on China’s monetary policy, we’ve always been interested in the use of monetary instruments by People’s Bank of China (PBoC).
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China’s Crippled Financial Sector
the informal financial market(shadow banking sytem) can be very volatile and undependable.
it is not easy for SMEs in other countries to get formal financing.
The main impediment in China is local governments, which compete with SMEs for bank loans and inevitably crowd them out from the formal banking sector.
Local governments rely on bank credit to invest in infrastructure and real-estate development.
Another impediment is the dominance of large banks, and far less financial institutions of other kinds. The four largest banks in China account for 60% of the country’s total bank lending. by Nov 26