The neverending story

Another episode today in the ongoing saga of China’s monetary policy (be still, our beating hearts). On one side, the China Banking Regulatory Committee and its ilk have called for tightening to avoid, among other things, a nasty non-performing loan crisis in the not-too-distant future. They were no doubt cheered by yesterday’s news of slower lending in April. On the other side, the People’s Bank of China (PBoC) now says that ensuring an “ample” supply of money is the way to go. The central bank’s reasoning is that while lending has surged, it has tended to focus on government projects, not smaller businesses. On top of that, the PBoC doesn’t yet think the rebound has firm footing. Further proof of shakiness may come from April cargo figures, which showed a 1.9% year-on-year decline in throughput. Neither are things rosy at the National Social Security Fund, which is planning to improve its risk control and investment strategy after the dismal performance of its investments in 2008. A new investment option could present itself in Taiwan, as the less-saga-than-story-of-blossoming-love between Taiwan and the mainland continues. According to new plans, Taiwan and mainland China would be allowed to trade each others’ shares for the first time.