China must resist cheap money temptation

Lower borrowing costs are the last thing needed to rebalance economy

The democracy protests in Hong Kong are unlikely to unhinge global markets so long as there is a peaceful outcome. They do, nevertheless, constitute the first serious threat to President Xi Jinping and China’s strategy to manage the economy at a difficult time.

For more than two years, China’s official lending and deposit rates have been fixed at 6 per cent and 3 per cent respectively. Monetary and credit conditions have tightened a little, though, because nominal gross domestic product growth has fallen, from nearly 12 per cent to about 9 per cent….“more:”