Chinese premier clashes with central bank over credit expansion

PBoC rejects premier’s warnings over interest rate arbitrage and bill financing

Chinese premier Li Kequiang

China’s premier, Li Keqiang, and the country’s central bank had a very rare public disagreement on February 20, over the expansion of credit.

Li expressed concerns over China’s record credit expansion in January, especially the surging bill financing and short-term loans, during a State Council meeting. He warned of the risks of ballooning short-term lending while reiterating that “China is not opening the floodgate of loans” during a meeting with the Chinese cabinet.

The premier cautioned

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