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Epic tightrope walk faces PBOC as China exits Covid

As Beijing pivots energetically from Covid lockdowns to economic recovery, no one is in a hotter seat than Yi Gang, governor of the People’s Bank of China.

Since the 1990s, the Group of Seven nations has adopted a “central-banks-take-the-lead model.” For better or worse, political polarization and gridlock had government officials passing economic maintenance duties to monetary officials. Now China is, too.

In Beijing’s case, Yi’s team is the obvious choice to lead the charge back toward 5% growth in 2023. President Xi Jinping’s moves this week to scale back pandemic curbs sets the stage for a reopening trade the likes of which Asia has never seen before.

This onus is on the PBOC to prime the pump, and Yi is already on the case. The PBOC’s November 25 move to support struggling companies with a cut in reserve requirement ratios was a preview of a stimulus policy about-face.

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