June 28 (Bloomberg) -- In signaling this week that it was
prepared to inject liquidity into the markets, the People’s Bank
of China brought the country’s financial system much needed
relief that a “Lehman moment” might be avoided.
The current credit crunch, in which the central bank has
refused to act as the lender of last resort, differs markedly
from two previous episodes, in the late 1980s and early 1990s.
It also shows that China’s approach to macroeconomic governance
has evolved: Its leadership no longer relies solely on
political and administrative controls, and is allowing market
forces take a greater role.