China's banking regulator issued a stern warning to banks to strictly comply with capital requirements or face sanctions, the clearest sign yet Beijing is worried about possible risks building in the country's financial system after a year of blow-out lending, The Wall Street Journal reported.

A growing number of global leaders are urging China to look to its long-term interests and allow its tightly controlled currency to rise. But they are encountering reluctance from a government still very much worried about the economy in the short term, The Wall Street Journal reported. stronger yuan, which would make Chinese exports less competitive, is particularly unappealing for China in a year when exports are down about 20% and many manufacturers have closed.

Germany, second only to China as the world's leading exporter of goods, has been particularly hard-hit by the collapse of global markets. But the mass unemployment some had feared has failed to materialize. Labor experts in many countries are wondering how Germany has done it, Spiegel Online reported. Germany currently has 1.1 million workers participating in short-time working programs, known in German as Kurzarbeit. They include people who don't have enough work, but who also are nevertheless not being let go.

China’s stimulus-induced lending binge probably propelled growth in the third quarter to its fastest pace in a year. Now, policy makers have to figure out how to wean the economy off state support, Bloomberg reported. The country’s rebound has been powered by 4 trillion yuan ($586 billion) of spending on railways, roads, power plants and public housing. The program ends next year, forcing Premier Wen Jiabao to find new ways to sustain the expansion with increased consumer spending and the financing of small businesses.

China would risk instability by letting the yuan appreciate excessively, the Asian Development Bank cautioned after the U.S. Treasury Department criticized the currency’s lack of flexibility. “We should not push hard for China to appreciate the currency too fast,” said Yolanda Fernandez Lommen, chief China economist for the ADB. “We don’t want to see China, the third largest economy in the world, unstable.

General Motors could finalize the sale of its German auto unit Opel as early as this week, the U.S. automaker's CEO said Tuesday. Fritz Henderson, visiting China for the first time since GM was restructured last summer, was also upbeat about the prospects for the sale of the company's Hummer unit to Chinese buyer Sichuan Tengzhong Heavy Industrial Machinery Corp., which is still awaiting Chinese government approval, The Associated Press reported.

Can Japan’s new leaders persuade their fellow citizens to stop hoarding money and thus ease one of the biggest structural problems plaguing the world’s second-largest economy? Democratic party policymakers fresh from their historic general election victory over Japan’s long-ruling Liberal Democrats say they are determined to achieve an economic rebalancing that has eluded governments since the 1980s.

China's central bank will soon announce bank loan statistics for September, and there have already been press reports that new lending may be increasing again after a lull in July and August, The Wall Street Journal reported. On top of record new lending in the first half of the year, despite a global slowdown, this is provoking new fears of another nonperforming loan crisis on the horizon. The dilemma for Chinese policy makers will be how to deal with that problem.

Japan's economic stimulus appears to be petering out after figures released today showed industrial output rose in August but at a slower rate for the fourth month in a row, The Guardian reported. The data comes as Japan's new government attempts to reconcile plans to cut spending and meet demands for an extra budget to drive the world's second-biggest economy towards recovery. The economy, trade and industry ministry expects production to rise 1.1% this month and by 2.2% in October.

China’s central bank deputy governor, Hu Xiaolian, proposed setting up a multinational sovereign wealth fund to invest in developing nations and help reduce the danger of another financial crisis, Bloomberg reported. Hu’s proposal “will give countries with excess foreign- exchange holdings more options to invest in the emerging world rather than in the U.S.,” said Ma Jun, chief China economist at Deutsche Bank AG in Hong Kong. The current crisis is due in part to the dollar’s role as the main currency for trade and foreign-exchange reserves, Hu said in the paper.