China’s shrinking trade surplus and the weakest export growth since 2009 may encourage Premier Wen Jiabao to keep cutting banks’ reserve requirements to sustain expansion in the world’s second-biggest economy, Bloomberg reported. Overseas shipments rose 13.8 percent in November from a year earlier, according to customs data released Dec. 10 in Beijing. The excess of exports over imports fell by 35 percent. A smaller trade surplus and signs that capital has started to flow out of the country may encourage the ruling Communist Party to add to a Nov.

Saab's Dutch owner and China's Zhejiang Youngman Lotus Automobile have agreed that the Bank of China , the nation's fourth-largest bank by market value, will come in as part owner of the ailing carmaker, according to a source familiar with the deal, Reuters reported. Under the new deal, the Bank of China will replace Chinese investor Pang Da Automobile Trade Co. Youngman and the Bank of China will own just under 50 percent of the company. The move could help pave the way for an approval by General Motors , which still has preferential shares in Saab and rejected an earlier rescue plan.

China’s central bank, in a surprise move on Wednesday, shifted its economic focus from fighting inflation to stimulating growth by freeing the nation’s commercial banks to lend more money, the International Herald Tribune reported. The bank’s move was separate from the subsequent announcement by central bankers in the United States, Europe and Japan that they would pump more dollars into the European banking system. And Western officials said Beijing’s move was not done in coordination with theirs.

China is more interested in investing directly in Europe than buying European Union debt with its colossal foreign currency reserves, a senior civil servant said Tuesday, The Wall Street Journal Real Time Brussels blog reported. Wang Yiming, a vice director at the National Development and Reform Commission’s macroeconomic research institute, said at the EU-China forum in Brussels that internal discussions about how to invest the country’s $3.2 trillion of reserves are leaning in this direction.

China's government said yesterday that it has increased scrutiny of trading houses, and that exchanges set up without Beijing's approval will be banned from trading derivatives and other financial products, the Wall Street Journal reported today. In the January-October period, 58 trading houses were established, the state-run China Daily newspaper said Thursday. "Currently, some trading houses are conducting stock futures trading without regulatory approval.

China and Hong Kong said yesterday that they have doubled the value of a bilateral currency swap to 400 billion yuan ($62.92 billion) as Beijing seeks to expand the pool of yuan set aside to ease any strain on foreign banks that may be under pressure to access the Chinese currency, the Wall Street Journal reported today. The expanded swap agreement allows the Hong Kong Monetary Authority, the territory's de facto central bank, to tap a yuan pool from the People's Bank of China.

Local governments in China are complaining that monetary tightening by the central bank is behind their problems with economic growth, revenue and debt, but if they are hoping that the top leadership in Beijing will alter monetary policy, they are going to have to wait, according to a Reuters analysis yesterday.

There is now evidence that the euro zone debt crisis is not only spreading to banks by undermining their ability to fund themselves, but to the major trading partners with the region. In this case, that is China, the Wall Street Journal reported Friday. And what is bad for China is definitely bad for the global economy. In fact, news of a slowdown in China will probably eclipse any of the good news coming out of the U.S. Any negative impact on the U.S. economy from the euro zone crisis may be slower in showing through, even though U.S.

China’s banking regulator warned lenders that some projects backed by local governments may run out of funds, and loans to property developers are likely to sour as sales slow, a person with knowledge of the matter said, Bloomberg reported. The China Banking Regulatory Commission told lenders last week to step up asset sales and debt restructuring for unprofitable local government financing vehicles that are struggling to repay loans, the person said, declining to be identified as the instructions were private.

Diplomatic deadlock is curbing China's will to provide cash to help end the euro zone crisis after Europe spurned the simplest of Beijing's three key demands, two independent sources have told Reuters. China had offered help in return for European support to grant it either more influence at the International Monetary Fund, market economy status in the World Trade Organization, or the lifting of a European arms embargo, said the sources, both of whom have direct knowledge of the matter, including one who has ties to the leadership in Beijing.