China supports Spain's economic reforms and will continue buying Spanish government debt, Chinese Vice Premier Li Keqiang wrote in a newspaper editorial, the latest sign of China's growing role in protecting the stability of the European Union, its largest export market, The Wall Street Journal reported. Spain has faced increasing difficulties in financing a yawning budget deficit after Greece's financial meltdown in early 2010 sparked concerns about the problems of other fiscally frail euro-zone countries.

China’s inflation may cool after manufacturing growth slowed in December because of a tighter monetary policy and the closure of energy-wasting and highly polluting factories, Bloomberg News reported today. Premier Wen Jiabao is seeking to limit bank lending and inflows of capital that could fuel inflation after a record expansion in credit drove the nation’s recovery. The central bank raised interest rates on Christmas Day and, six days later, the currency regulator said it was expanding a program to let exporters keep revenue overseas.

Growth in Chinese manufacturing activity slowed this month for the first time since July, an industry survey showed, but the reading remained relatively strong and analysts predicted further inflation-fighting measures from the government like interest-rate increases and currency appreciation, the Wall Street Journal reported today. The HSBC China Manufacturing Purchasing Managers Index, a monthly gauge based on a survey of executives, also showed that prices for factory inputs rose in December at their slowest rate in three months.

China’s commerce ministry announced a steep reduction in export quotas yesterday for rare earth metals in the first months of next year, a move that threatens to cause further difficulties for manufacturers already struggling with short supplies and soaring prices, the New York Times reported today. China mines more than 95 percent of the global supply of the metals, which are essential for smartphones, electric cars, many computer components and a range of military hardware.

China raised interest rates for the second time in slightly over two months, signaling the authorities' resolve to combat rising inflation, the Wall Street Journal reported today. The People's Bank of China said Saturday that it will raise the one-year yuan lending rate by a quarter of a percentage point to 5.81 percent from 5.56 percent, and the one-year yuan deposit rate to 2.75 percent from 2.50 percent. The move comes after the central bank raised on Oct.

China plans to tighten up rules governing sponsors of initial public offerings (IPO) after a surge of new issues this year sparked concerns about the quality of disclosure in IPO prospectuses, Reuters reported today. Under the new rules, IPO sponsors will be interviewed by the securities regulator regarding the due diligence process of a new issue and IPO sponsors will also be required to complete a due diligence check-list and sign off a declaration that they are aware of the legal consequences of negligent acts.

China has promised to take further “concerted action” to support European financial stabilisation, including continuing to buy the bonds of countries at the centre of the sovereign debt crisis, the Financial Times reported yesterday. Officials said that Wang Qishan, a Chinese vice-premier, had given assurances that China would step up support for European stabilisation efforts “if necessary”. Wang made the pledge during the third annual China-EU High Level Economic and Trade Dialogue, held in Beijing on Tuesday.

Shanghai regulators ordered banks in Shanghai, China's financial center, to halt loans for fixed-asset investments—likely affecting construction and property development—for the rest of the year, in a fresh move to contain the flood of credit that has helped accelerate inflation, the Wall Street Journal reported on Friday. Shanghai's banking regulator may be feeling the pressure to rein in the banks under its jurisdiction after new loans in the city grew particularly strongly in November.

Lending by lightly regulated financial companies outside China's formal banking system has ballooned this year, causing increasing headaches for the government in its efforts to manage the economy and control inflation, observers say, The Wall Street Journal reported. China's government has traditionally used its control of the largely state-owned banking sector to regulate the country's pace of economic growth, directing it to pump out cheap credit in good times and restricting the volume of new loans to prevent overheating.

China's biggest auto maker is close to finalizing a plan to buy a stake in General Motors Co., which is preparing for an initial public offering next week, according to people familiar with the discussions, Dow Jones Daily Bankruptcy Review reported. SAIC Motor Corp., which has built cars with GM in China since the 1990s, is among foreign entities that will become part owners of GM when the auto maker returns to the public markets, these people said. A final decision could come within the next couple of days.