China fails to sell debt, adding to liquidity fears

A Chinese government bond sale fell short of its target on Friday as the cash supply in the economy grows increasingly tight, Financial Times reported. The government has not added liquidity to the country’s money market despite signs that the banking system is under stress. The finance ministry sold only US$1.5 billion in bonds last week despite its offer to sell US$2.4 billion. The government has sought to curb credit growth due to heightened concerns over a growing level of overall debt, particularly in the lightly regulated shadow banking sector.