"Moreover, the institution headed by Bernanke--the US FED--,as well as most other major central banks have in recent decades stopped looking much at money as a determinant of inflation" and "China's real economy is fairly well integrated in the world economy via trade channels" Could the reason that the FED and other central banks have a relaxed view on the M2 be that they are interconnected with other countries through both trade and financial channels? The RMB still has some way to go before it becomes a mayor part of the world financial channels. It means that the excess liquidity in the Chinese M2 has to be allocated outside of China via trade channels by buying commodities or goods. My fear is that the excess money simply does not leave China fast enough. I am pretty sure exchange through trade channels will be slowed down because trade is becoming more political sensitive as unemployment rates rise.