Why Is China Curbing Bank Lending?

After injecting hundreds of billions of dollars for stimulus coupled with hundreds of billions of bank lending ordered by the government, China has been controlling the bank lending and restraining the stimulus. Thanks to its huge stimulus program and extra bank lending, China’s GDP was growing at around 10%, the real estate bubble has been re-inflated and the stock market doubled. As the Chinese government restrained the lending in an attempt to curb inflation, the stock market collapsed. Who is/would be suffering from these policies most?

Meanwhile, the Korea Composite Stock Price Index fell under the 1,600 level for the first time in two months to close at 1,595 points on February 2nd, on China’s move to clamp down on its bank lending.

It seems that China has de facto economic power for now, and many countries including Japan play along with it, like it or not.