TIMELINE-China pulls on reins as economy booms

Feb 12 (BestGrowthStock) – China has started slowly pulling in the
reins on loans and liquidity to stave off inflationary
pressures and prevent the world’s third-largest economy from
overheating.

The central bank said on Friday it was raising banks’
reserve requirements for the second time this year.

Global markets are rattled that tighter monetary conditions
will dampen demand from an economy that has led the global
recovery from the financial crisis.

The following shows key developments this year:

Feb 12 – People’s Bank of China surprises markets by
raising banks’ reserve requirements 50 basis points, effective
Feb 25, its second increase this year. Few traders had expected
another another move so soon after a surprisingly low inflation
reading for January. [ID:nTOE61B068]

Feb 11 – PBOC says it will guide monetary measures away
from anti-crisis footing but maintain appropriately loose
policy with domestic demand still not on solid ground; vows to
ensure stable growth while controlling inflation expectations.

Feb 11 – Chinese banks extend 1.39 trillion yuan in new
local-currency loans in January, up from 379.8 billion yuan in
December and more than expected, data shows.

Feb 11 – Chinese urban property prices rise 9.5 percent in
January from a year earlier, adding to worries a property
market bubble is forming. [ID:nBJB003683]

Feb 3 – A major Chinese bank, Bank of China, raises
mortgage rates in one of the first signs of how government
credit clampdown could tame turbo-charged growth.
[ID:TOE61205G]

Feb 2 – Reserve Bank of Australia surprises markets by
skipping a rate rise, noting tighter policy in China among
other factors in its statement. Before the meeting, a rate rise
had been almost fully priced into markets. [ID:nSGE61003K]

Feb 1 – China orders banks to ensure excessive credit has
not illegally entered the stock or property markets in latest
bid to bring pace of lending under control.[ID:nTOE61003S]

Feb 1 – Shanghai stock market closes at lowest in more than
three years on fears of more tightening measures.
[ID:nTOE610091]

JANUARY

Jan 30 – PBOC Deputy Governor Zhu Min tells Reuters the
central bank is ready to take further steps to ensure rapid
loan growth does not destablise the economy. [ID:nLDE60T0BZ]

Jan 29 – PBOC says it will ensure money and credit growth
remain ample in 2010 even though inflation is likely to rise.

Jan 27 – China’s biggest bank ICBC says it has stopped
rolling over some loans to slow credit growth as Chairman of
China Banking Regulatory Commission instructs banks to ensure
even pace of lending over the course of 2010. [ID:nSGE60Q05X]

Jan 26 – IMF sees no serious risk of a market bubble in
China, a senior official tells a news conference. [ID:nWEN8975]

Jan 21 – China reports that GDP in Q4 2009 rose 10.7
percent over the same year-earlier quarter. [ID:nTOE60K011]

Jan 21- China’s central bank guides up its bill yields for
the second time this year, highlighting its determination to
fight inflationary pressures after strong Q4 GDP.
[ID:nTOE60K011]

Jan 20 – Chinese banking authorities order some major banks
to curb lending for the rest of January, intensifying efforts
to prevent loan growth from overheating the economy.
[ID:nTOE60J010]
Jan 20 – China tells Bank of China, Industrial & Commercial
Bank of China, CITIC Bank and China Everbright Bank to increase
reserve requirements by 0.5 percentage point. [ID:nTOE60J0A1]

Jan 19 – China will maintain “reasonable growth” in credit
and money supply and stick with proactive policies to boost
demand but will also curb speculative property investment and
take steps to deal with inflationary expectations, Premier Wen
Jiabao says. [ID:nTOE60I0A7]

Jan 18 – PBOC allows one-year bill yields to rise more than
expected, signaling it aims to shift fund drains to longer-term
tenors to rein in lending and fight inflation. [ID:nTOE60I03B]

Jan 17 – China’s banking regulator urges banks to be
cautious on lending this year, ensuring credit is used in the
real economy and not for speculation. It also calls on banks to
monitor the property sector and make “greater efforts” to
control loan risks.

Jan 13 – China renews vow to curb runaway property price
rises by increasing the supply of affordable housing and
cracking down on speculation. [ID:nTOE60C032]

Jan 12 – China announces a 50-basis-point increase in
banks’ required reserves, its strongest step yet towards
tightening monetary policy that rocks global financial market
because it came earlier than expected. [ID:nTOE60B095]
Jan 12 – PBOC raises yield on 20 billion yuan ($2.9 billion)
of 1-year bills, having held it steady for previous 20
auctions; also drains record 200 billion yuan from the
financial system via 28-day bond repurchase agreements.
[ID:nTOE60B020]

Jan 7 – Central bank surprises by raising auction yield of
its three-month bills for the first time since mid-August.

For more stories on China’s economy (Read more about the fastest growing economy.), click
[CN-MCE-RTRS-LEN]

For comments by Chinese policymakers, see
[CN-PLCY-RTRS-LEN]

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(Compiled by Asia Treasury Desk; +65 6870 3840]

TIMELINE-China pulls on reins as economy booms