China’s QE4 or QE3.5?

While markets ponder the Fed’s next move, swinging agitatedly between the probabilities of a rate rise and no change, China’s PBoC (People’s Bank) is quietly getting on with its job of reviving the Chinese economy. China is hugely important because her liquidity pool now matches America’s in size and the People’s Bank (PBoC) is one-fifth bigger than the US Fed. Call its actions a ‘QE4’ or something similar? But after last year’s tightening, latest analysis of the PBoC points to a renewed stimulus coinciding with greater stability in Chinese capital flows. The six months to June 2016 saw an annualised jump of 21.7% in the size of the PBoC balance sheet. This compares to an annualised drop of 17.7% in the six months to December 2015. No wonder commodity prices and EM are firm?