Bank Lending, Inflation, and China's Stock Market (2004–2010) | Zendy

Richard C. K. Burdekin | Zendy; Ran Tao | Zendy

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Bank Lending, Inflation, and China's Stock Market (2004–2010)

Author(s) -

Richard C. K. Burdekin,

Ran Tao

Publication year - 2011

Publication title -

economics research international

Language(s) - English

Resource type - Journals

eISSN - 2090-2123

pISSN - 2090-2131

DOI - 10.1155/2011/652983

Subject(s) - china , stock market , monetary policy , economics , monetary economics , stock (firearms) , inflation (cosmology) , financial system , business , mechanical engineering , paleontology , physics , horse , theoretical physics , political science , law , biology , engineering

The 2009 surge in bank lending in China was accompanied by allegations of substantial funds being funneled into the nation's stock and property markets. This paper uses 2004–2010 People's Bank survey data to examine the possible linkages between banking activity and the stock market as well as the associated inflation risks. In general, stock market strength in China seems to be accompanied by rising inflationary concerns, increased bank lending activity, and reduced banker confidence that stable conditions will be maintained. This suggests that the Shanghai market could serve as a useful indicator variable for Chinese monetary policy

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