Chinese premier clashes with central bank over credit expansion
PBoC rejects premier’s warnings over interest rate arbitrage and bill financing
China’s premier, Li Keqiang, and the country’s central bank had a very rare public disagreement on February 20, over the expansion of credit.
Li expressed concerns over China’s record credit expansion in January, especially the surging bill financing and short-term loans, during a State Council meeting. He warned of the risks of ballooning short-term lending while reiterating that “China is not opening the floodgate of loans” during a meeting with the Chinese cabinet.
The premier cautioned
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