China’s Bank Moves Jolt Markets:Beijing Raises Reserve Requirements to Tighten Money Supply, but Investors Wonder Whether It Can Strike Right Balance

BEIJING—China signaled Friday it is acting more quickly than expected to rein in its booming economy, jolting international shares and fueling concerns over the challenges Beijing faces as it seeks to rein in one of the world’s biggest economies.

China’s central bank moved Friday to further restrain bank lending by raising the share of deposits banks must hold as reserves. It marks Beijing’s latest attempt to rein in last year’s stimulus programs—a spree of bank lending that fueled Chinese growth and undergirded a weak global economy but now threatens to inflate dangerous asset bubbles.

nvestors remain concerned about whether authorities can strike the right balance. “This is creating some concern here that they might slow down their economy so much that it impacts the global rebound,” said Robert Pavlik, chief market strategist at money-management firm Banyan Partners in New York.

China’s announcement came as the European Union said that fourth-quarter growth in the 16 countries that share the euro was lower than expected, raising additional questions about the prospects for global recovery.(By TERENCE POON And ANDREW BATSON, The Wall Street Journal, FEBRUARY 12, 2010)

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China Sees Growth Engine in a Web of Fast Trains

WUHAN, China — The world’s largest human migration — the annual crush of Chinese traveling home to celebrate the Lunar New Year, which is this Sunday — is going a little faster this time thanks to a new high-speed rail line.

The Chinese bullet train, which has the world’s fastest average speed, connects Guangzhou, the southern coastal manufacturing center, to Wuhan, deep in the interior. In a little more than three hours, it travels 664 miles, comparable to the distance from Boston to southern Virginia. That is less time than Amtrak’s fastest train, the Acela, takes to go from Boston just to New York.

Even more impressive, the Guangzhou-to-Wuhan train is just one of 42 high-speed lines recently opened or set to open by 2012 in China. By comparison, the United States hopes to build its first high-speed rail line by 2014, an 84-mile route linking Tampa and Orlando, Fla.

Speaking at that site last month, President Obama warned that the United States was falling behind Asia and Europe in high-speed rail construction and other clean energy industries. “Other countries aren’t waiting,” he said. “They want those jobs. China wants those jobs. Germany wants those jobs. They are going after them hard, making the investments required.” (By KEITH BRADSHER, The Wall Street Journal, February 12, 2010)

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