PBoC sounds caution amid rising market

Readers with more Calvinistic tendencies may feel somewhat reassured today by a new note of worry emanating from the halls of the People’s Bank of China (PBoC). In its position since January as chief cheerleader of a loose monetary policy and willy-nilly bank lending, the PBoC has been the bacchanalian counterpart to the dour realists at the China Banking Regulatory Commission (CBRC). Now, however, the central bank is joining the CBRC in warning that the good times risk coming to an end – as a Scottish grandmother would argue they always must – due to a significant portion of new loans being channeled into the stock and property markets. As of yet, the stock market doesn’t seem worried and the appetite for new initial public offerings hasn’t gone away. Rolling stock maker China CNR Corp is the latest company to seek an IPO; it’s hoping to raise up to US$1.5 billion. Investment is also continuing in more tangible assets. Suntech Power Holdings, the solar power giant, has signed agreements to build 1.8 gigawatts of new solar capacity (a full 0.59 GW more than is needed to power a flux capacitor) with governments in Shaanxi and Qinghai provinces, and the cities of Shizuishan and Panzhihua.