The action, which shook global financial markets, could help cool a market in which housing is unaffordable to ordinary citizens. Banks will have to set aside more reserves with the central bank.
Reporting from Washington and Beijing ¡ª Amid growing fears of a real estate bubble, Chinese officials moved Friday to restrain bank lending and put a lid on incipient inflation, a surprise action that shook financial markets around the world on concern that the leading engine of the global economic recovery could be slowing.
China's action will require banks to set aside more reserves with the nation's central bank, instead of lending the money to businesses and consumers. It was the second such step in a little more than a month and is aimed at curbing excessive borrowing, which has stoked government worries that China's economic gains could be undone by an overheated real estate market. |
