No dammed lake of money

Supply rate of 13 percent necessary if China is to avoid an economic downturn and increased unemployment

China's money supply has generated enormous publicity recently. The amount of broad money, or M2, is one of the important indicators of money supply, and the ratio of M2 to gross domestic product is typically used as the measure of a country's money supply. In general, the larger the ratio, the more excessive the money supply.

China's marginal money supply accounted for nearly half of the total money supply growth in the world and its M2 reached 97.41 trillion yuan ($15.5 trillion) in December 2012. Its GDP reached 51.93 trillion yuan and the M2 to GDP ratio hit a record high of 1.88. In contrast, the M2 of the United States was $10.5 trillion at the end of last year, while its GDP was $15.7 trillion, a ratio of just 0.67.