China’s Big Banks Look More Like Paper Tigers - they are “built on quicksand

China cut the amount of cash that banks must set aside as reserves for the third time in six months, pumping money into the financial system to support lending after data showed a slowdown in growth is deepening.

(Reuters) - China may need a back-up plan to stop economic growth being cut short by a surprise dip in demand at home and abroad that suggests monetary policy easing steps taken since the final quarter of last year are insufficient to deal with the downturn.

SHANGHAI - China's central bank cut the amount of cash that banks must hold as reserves on Saturday, freeing an estimated 400 billion yuan ($63.5 billion) for lending to head-off the risk of a sudden slowdown in the world's second-largest economy.

BEIJING - China's economy stuttered unexpectedly in April with lower than expected output data, softening retail sales and easing prices suggesting economic headwinds might be stiffer than thought, requiring more robust policy responses to counter them.

The yuan's value has been a lightning rod in Sino-U.S. ties, with some in Washington accusing Beijing of deliberately holding down the currency to gain export advantage. China denies the allegation and says it too wants a currency whose value is decided by the market, but insists any changes to its foreign exchange policy must be gradual.



May 4 (Reuters) - The United States supports China's bid to have the yuan included in the International Monetary Fund's basket of currencies, Chinese Vice Premier Wang Qishan said on Friday after high-level talks between Beijing and Washington.