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China Revamps Credit Expansion as PBOC Balance Sheet Shrinks

  • PBOC assets have dropped as foreign-exchange reserves fell
  • China's credit and money supply have expanded nonetheless

Sometimes it helps to have a command economy.

While central bankers in Japan, Europe and the U.S. have struggled in recent years to stoke credit growth even as they grew their balance sheets to unprecedented size, the People’s Bank of China is succeeding, with a very different approach.