China closes policy gaps as inflation battle heats up

China's central bank has been hiking reserve ratios on the big banks to slow lending. In January, we saw the fruits of this policy, as small and medium banks lent 70% of the $1.1 trillion total loans for the month. That explains why the central bank hiked reserve requirements on some small and medium banks this week. Chinese municipalities are also stepping up the fight against home prices. The number of Chinese cities restricting home purchases is set to double.