China Banks Rein in Lending but Economy’s Growth Prospects Remain Strong

As if the stock market hadn't received enough bad news yesterday (Tuesday), reports surfaced that China's banks have nearly hit their lending quotas for the year - meaning the world's fastest growing, and second-largest, economy will cool considerably over the next few months. However, the news - out of China at least - might not be as bad as it seems. Political strife resonated throughout the investing world yesterday as North Korea and South Korea exchanged fire over Yeonpyeong Island and Irish Prime Minister Brian Cowen pledged to dissolve that country's government and allow for an early election in January. Strictly economic headlines weren't any consolation as it was revealed that China's banks are unlikely to extend many new loans as 2010 draws to a close.