Chart of the day: Downward credit growth

The People's Bank of China is most likely to offer help to local government debt restructuring, which is a crucial component of mainland fiscal reform. In the spirit of reform, a quantitative easing programme of directly buying government bonds is out of the question, but a programme resembling a long-term refinancing operation is much more sensible and viable. The central bank will aim at preventing any liquidity tension from derailing the reform process rather than flooding the economy with cheap credit.