China May Ease Bank Reserve Requirements
After nearly a year of stepping on the brake to slow its over-heating economy, China appears to be on the brink of tapping the accelerator once again. The country’s economy grew at its slowest pace in two-and-a-half years in the…
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After nearly a year of stepping on the brake to slow its over-heating economy, China appears to be on the brink of tapping the accelerator once again. The country’s economy grew at its slowest pace in two-and-a-half years in the fourth quarter of 2011 (a mere 8.9%), and now the country’s government wants to ease up on bank capital and lending requirements.
It’s difficult to figure out what to make of this, other than that China’s managed capitalism is a lot more about central management than it is about capitalism.
If the Chinese do lower capital reserve requirements, that will make more capital available to lend and will certainly lift demand for construction again. That will raise demand for steel and other raw materials and commodities, including crude oil.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
