China tightens its belt

From 18 May, the nation’s biggest lenders will have to set aside cash to a record 21% against their liabilities, in China. The People’s Bank of China (PBoC) made this announcement on Thursday. The question is whether one should praise the resolve of PBoC to engineer low inflation or should one discuss the risk of hard landing in China. Of course, there is also the third possibility of whether this resolve is being shown too late and in the wrong place.

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