July 30, 2009

China's stock markets recovered modestly today after fears of tightening credit drove key indexes on Wednesday to their steepest losses in eight months.Investors seemed appeased for the moment, after a top central bank official indicated that the government had no plans to suddenly corral the banking industry's liberal lending policies.

The remarks, which were published on the People’s Bank of China website late Wednesday, appeared to be aimed at allaying worries that China’s economic rebound would slow."We need to focus on using market means and utilizing various monetary policy tools, instead of setting lending quotas, to guide a reasonable and sustainable lending growth, satisfying the need of a stable economic recovery," said Su Ning, deputy governor of the central bank.