Chinese-style quantitative easing takes shape

Beijing

CHINA'S leaders are increasingly relying on the central bank to help implement government programmes aimed at shoring up growth, in an adaptation of the quantitative easing policies executed by counterparts abroad.

Rather than bankroll projects directly, the People's Bank of China (PBOC) is pumping funds into state lenders, known as policy banks, to finance government-backed programmes. Instead of buying shares to prop up a faltering stock market, it's aiding a government fund that's seeking to stabilise prices. And instead of purchasing municipal bonds in the market, it's accepting such notes as collateral and encouraging banks to buy the debt.