China increased its bank reserve requirement yesterday by .5 percent to 8.5 percent in an attempt to siphon off excess liquidity. The move comes just after China's second quarter report put its GDP growth rate at 11.3 percent. While raising the reserve requirement is considered by many countries to be a very blunt monetary policy instrument, China's blistering economic growth warrants something stronger than simply raising interest rates to tighten credit. The central bank has even said that a 10 percent reserve requirement by the end of the year is not out of the question.