It may be spring time in the China economy but somebody is feeling the heat.
The People's Bank of China raised the minimum rate banks charge on one-year loans to 5.85%. It is the first increase in interest rates in nearly 18 months.
The reason...China's economy expanded at a 10.2 percent rate in the Q1 from a year ago.
The fear, of course, is that lenders will not be able to pay back their loans if inflation runs unchecked. And also it is better to make it harder for lenders to get the money in the first place. Did I get that right?
This is the first I have read that China has realized that it canNOT let its economy just grow and grow and grow.
Is this a good thing - keeping the economy from overheating? Or should it be left alone?
What do you think?
