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WORLD NEWSTuesday 1 March 2016
China moves to shore up slowing economic growth
JOE McDONALD A woman speaks on her phone near a display highlighting the new Chinese bank notes at a bank in just over four months, fol-
Associated Press in Beijing, China. In a step to shore up slowing economic growth, China freed up more money for lowing a similar 0.5 percent
BEIJING (AP) — In a step lending Monday by cutting the amount its banks are required to hold in reserve. point cut on Oct. 23.
to shore up slowing eco- It followed a declaration
nomic growth, China freed (AP Photo/Ng Han Guan) Friday by Premier Li Keying,
up more money for lend- the country’s top econom-
ing Monday by cutting the time when downward pres- elevated,” Louis Kuijs of Ox- that for China’s policymak- ic official, to global finance
amount its banks are re- sures on growth remain ford Economics said in a ers, growth remains key.” ministers meeting in Shang-
quired to hold in reserve. strong and uncertainty is report. “This move suggests The reduction is the second hai that China has “poten-
The move follows decla- tial, resilience and flexibil-
rations by Chinese lead- ity” to deal with economic
ers that they have room challenges.
to boost growth despite China’s economic growth
concern in global financial fell last year to a 25-year
markets about capital out- low of 6.9 percent and is
flows and stock and cur- forecast to fall further this
rency turmoil. year.
The amount of deposits Beijing’s room to maneu-
commercial lenders will be ver has been reduced by
required to leave with the turmoil over China’s cur-
central bank will be cut by rency, the yuan, since the
0.5 percentage points on surprise introduction of a
March 1, the central bank new mechanism for setting
announced. That would the state-controlled ex-
reduce reserve levels for change rate last Aug. 12.
the country’s major state- The yuan has slid in value
owned banks to 17 percent since then, prompting an
of deposits — still by far the outflow of capital that
world’s highest level. spiked to a record $135 bil-
“The aim clearly is to sup- lion in December. An inter-
port the economy at a est rate cut to perk up eco-
nomic growth would make
China bracing for North Korea response to sanctions the yuan even less attrac-
tive, possibly fueling further
C. BODEEN to return to negotiations, olution all sides should re- inspections, prohibit the outflows.
Associated Press such as offering progress frain from taking any mea- sale of small arms and oth- “Today’s move suggests
BEIJING (AP) — Beijing is on on a permanent peace sures that could escalate.” er conventional weapons that concerns about capi-
alert for any angry respons- agreement between the China is North Korea’s most to the North, and impose fi- tal flows have eased,”
es from North Korea to pro- sides. The two countries are important ally, biggest nancial sanctions targeting Mark Williams of Capital
posed new United Nations still technically at war be- trading partner and key North Korean banks and Economics said in a report.
sanctions over the North’s cause the 1950-53 Korean source of food and fuel. assets and ban all dual-use “It may be that the PBOC
recent nuclear test and War ended with a cease- However, Beijing says its in- nuclear and missile-related senses that speculative
rocket launch, a Chinese fire, not a peace treaty. fluence with Kim Jong Un’s items. The proposed sanc- pressure has diminished or
diplomat said Monday. “We are fully aware that in government is limited and tions would also limit and that closer monitoring of
The diplomat, who ac- the next couple of months has argued against mea- in some cases ban exports capital flows has helped
companied Foreign Min- the situation in this area sures from the internation- of coal, iron, gold, titani- slow the flow.”
ister Wang Yi during talks could be very sensitive. On al community that could um and rare earth miner- The move also suggests
in Washington last week, the one hand, you have to spark its collapse, poten- als from North Korea and Chinese leaders are less
said the two countries had be prepared, keep alert on tially leading to a wave would prohibit countries concerned about exces-
agreed on the need for what kind of reaction might of refugees crossing the from supplying aviation sive lending following
harsh sanctions against be from Pyongyang,” the border into China and the fuel, including rocket fuel, strong credit growth in
North Korea for defying diplomat said. The U.S. and stationing of U.S. and South to the country. Items such January. That prompted
U.N. resolutions. South Korea also bear re- Korean troops in the North. as luxury watches, snow- concern they might tight-
However, the diplomat, sponsibility to avoid actions Despite its reservations, Bei- mobiles, recreational wa- en controls to prevent a
speaking on condition of that North Korea might jing signed on to a draft ter vehicles and lead crys- run-up in already high debt
anonymity because of the view as provocative, such resolution that for the first tal were also added to a levels.
sensitivity of the issue, said as scheduled military drills, time would subject cargo long list of luxury goods that “A further acceleration
the U.S. should also provide he said. “We hope that af- ships leaving and entering North Korea is not allowed of credit will only deepen
incentives to North Korea ter the adoption of the res- North Korea to mandatory to import. q concerns about bad debt
and over-investment.q
