China Challenged By Sputtering Economic Dilemma

Chinese policymakers want to stimulate growth, but they are forced to follow policies designed to hold back debt and speculative behavior.

Chinese leaders are trying to reverse a sharp growth slowdown without abandoning policies that triggered much of the weakness to begin with a tricky task that could test Beijing’s ability to engineer a soft landing for the world’s number two economy.

In recent weeks, China has unveiled a handful of policy-easing measures to prevent a downward spiral in the housing market and rekindle overall growth, which slowed significantly in the third quarter.

The latest steps include making mortgages more easily obtainable and an unexpected cut this week in the amount of cash banks are required to hold, which could lower financing costs for businesses.