China Slowdown Response Shows Benefits of Supreme State Role

When it comes to stimulating an economy, China is betting state control has its advantages.

Confronted with mounting weakness, China’s policy makers are ramping up their response in a shift from their restrained measures last year. The central bank will swap some of its foreign-exchange reserves for stakes in two state-owned policy banks, Caixin reported Monday, allowing them to increase lending for projects such as shantytown redevelopment. The same day, authorities cut the amount of reserves banks must hold in a move to spur about $200 billion in lending.