Stock prices have rallied around the world thanks to unparalleled monetary support. Central bankers fear premature tightening could stunt fragile recoveries. China could be the first country bold enough to pull the plug.

In a surprise move, the People’s Bank of China withdrew about $12bn from the banking system on Tuesday. Beijing had long signalled that current monetary policy would be maintained. Short-term borrowing costs rose 32 basis points to 2.74 per cent, a rate not seen since before the pandemic. Chinese government bonds futures fell.

The sum of $12bn is just a fraction of the $500bn stimulus and liquidity the central bank has pumped into the financial system last year. The move may matter more as a declaration of intent. The Chinese authorities hope to take some of the air out of asset bubbles — notably bullish stock markets — which western peers are letting rip.