bank lending, inflation, and chinas stock market (2004–2010)银行贷款,通货膨胀,中国股市(2004 - 2010).pdfVIP

Hindawi Publishing Corporation Economics Research International Volume 2011, Article ID 652983, 7 pages doi:10.1155/2011/652983 Research Article Bank Lending, Inflation, and China’s Stock Market (2004–2010) Richard C. K. Burdekin1, 2 and Ran Tao1, 2 1 Robert Day School of Economics Finance, Claremont McKenna College, 500 E. Ninth Street, Claremont, CA 91711, USA 2 Economics Department, University of Wisconsin-Whitewater, WI 53190, USA Correspondence should be addressed to Richard C. K. Burdekin, rburdekin@ Received 22 August 2011; Accepted 31 August 2011 Academic Editor: James R. Barth Copyright © 2011 R. C. K. Burdekin and R. Tao. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The 2009 surge in bank lending in China was accompanied by allegations of substantial funds being funneled into the nation’s stock and property markets. This paper uses 2004–2010 People’s Bank survey data to examine the possible linkages between banking activity and the stock market as well as the associated inflation risks. In general, stock market strength in China seems to be accompanied by rising inflationary concerns, increased bank lending activity, and reduced banker confidence that stable conditions will be maintained. This suggests that the Shanghai market could serve as a useful indicator variable for Chinese monetary policy. 1. Introduction under the government’s easy money policy to an account with another bank, from which they could enter the stock The bad loan problems of China’s