How was this achieved? By the most dramatic burst of stimulus sending in history. Bear in mind Beijing's $586 billion stimulus package of last November. This year the stimulus has come from bank lending. The Beijing government told the banks to relax credit and they did. So far this year, bank lending is running at $1.2 trillion, and despite government requests to slow down, it was still $70 billion in August.
So by the end of the year, China's banks as this rate will have lent a third of GDP, around $1.5 trillion. China's $2 trillion reserves of foreign currencies and securities will not last long at this rate. But it still means that China is growing while the United States remains flat or sinking and credit is scarce. Total U.S.loansand leases insured by the Federal Deposit Insurance Corporation actually fell $249 billion, or 3.2 percent, in the first half of this year
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