2011 Year in Review: World Events
China Increases Bank Lending; Federal Reserve Reduces Loan Costs
In an unprecedented move, the People's Bank of China, which is controlled by the Chinese government, announced it would loosen its monetary policies in December to encourage lending and spending in its country. A month prior, the country's manufacturing and real estate indexes both showed significant drops, and the move was seen as a sign that the country's leaders are looking to increase its purchasing power and global influence. On the same day, the Federal Reserve announced a plan to lower interest rates on the U.S. dollar, hoping to encourage struggling countries to borrow more money. Both China and the Federal Reserve insisted the timing of the two announcements was coincidental.