China’s central bank tries to save the economy and stock market

ANDChina’s economy fell into deflation, the central bank’s lack of urgency was a source of frustration. Officials at the People’s Bank of China (PBaboutC) initially expressed the belief that deflation was, so to speak, temporary. When it was ongoing, they worried less about falling prices than about the side effects of fighting them. They were reluctant to ease monetary policy decisively because the Chinese currency was too weak, bank profit margins too small, and bond yields too low.