What to expect next year in terms of volatility out of Europe and the US, and how China will react, is still up in the air. But this year was plenty eventful, and China's central bank largely stuck to it's prudent monetary policy stance. Take a look at some of the changes.

During the first half of the year, the People’s Bank of China tightened monetary control to tackle high inflation. It raised its required reserve ratio six times to a record high. And as inflation eased in the second half of the year, the central bank eased policy and focused on boosting growth, by cutting the Triple R by 0.5 percent, the first time in 3 years.

Ba Shusong, finance department director of Development Research Center, State Council, said: "At the beginning of this year, inflation pressure increased, so monetary policy became tighter too. In July this year CPI reached its highest point of 6.5 percent. But now, the central bank has made some adjustments, to avoid a fall in economic growth, especially by cutting its required reserve ratio. The overall monetary policies throughout the year have been flexible."

Also in its battle against persistently high inflation this year, the PBOC raised its benchmark interest rate three times, by a total of 75 basis points. This, in effect, has tightened control on bank loans and reduced liquidity.

Ba said: "The steps reduced the loans available to the market, especially in property, to control bubbles. Also the policies reduced the speed of capital flows, preparing the economy for soft landing."

China’s prudent monetary policy is winning the battle against inflation - but it’s also reduced the amount of loans available for the nation’s small and mid-sized companies. Next year, the government will fine-tune policy keep rising prices in check, while ensuring stable economic growth.

Source:cntv.cn