Interesting story from Dow Jones:
"SHANGHAI (Dow Jones)--China's monetary policy for the next year may not be as tight as expected, the state-run China Securities Journal said in a front-page article.
The paper, which successfully predicted a reserve requirement ratio hike on Friday, said China has been on track to tighten its monetary policy for months, although the nation's highest decision-making body last week rectified a switch in the monetary-policy stance to "prudent" from "moderately loose".
The paper said China is widely expected to increase new yuan loans between CNY6.5 trillion ($977 billion) and CNY7 trillion in 2011, a decrease of up to 13% from CNY7.5 trillion it targeted for 2010. This year, China's new yuan lending target was set 22% lower than the record CNY9.6 trillion banks issued in 2009.
Additionally, China will likely refrain from raising its interest rates given the situation that developed nations' quantitative easing programs are driving more cash to emerging markets.
Defying analysts' expectations for multiple interest-rate hikes in China in the fourth quarter, the country's central bank has so far hiked the interest rate once in October."
