China's 122.8t yuan headache underscored by equity swings
Beijing
FOR China's central bank, the 36 per cent stock market rally through Jan 16 spurred in part by a surprise November interest-rate cut is the latest reminder that it's easier to unleash money than to guide it to the right places.
Since Zhou Xiaochuan became People's Bank of China governor in late 2002, the broad money supply base has expanded almost seven times to 122.8 trillion yuan (S$26.4 trillion) while the economy has grown about five times. That translates to a M2/GDP ratio of about 200 per cent versus about 70 per cent in the US, according to data compiled by Bloomberg.
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