As the business struggles as a result of renewed US tariff force and local weakness, China’s central banks implemented significant monetary easing measures on Wednesday, cutting a significant interest rate and lowering the stockpile requirement for lenders. According to the People’s Bank of China ( PBOC), the lending rate for commercial banks has been reduced by 0.25 percentage points, bringing the rate to 1.5 %.
AP
. In an effort to encourage more lending, the central bank also reduced the reserve requirement ratio ( RRR ), the amount of money that banks must hold in reserve, by 0.5 %. The action comes as US President Donald Trump’s striking taxes, as high as 145 % on some Chinese imports, start to have a significant impact on China’s export-driven business. It is one of Beijing’s most important policy interventions since September 2024.
AFP
reported. At a press conference, the PBOC’s governor, Pan Gongsheng, announced the price reductions, stating that the central banks would also reduce its slow repurchase rate from 5 % to 1.4 %. In an effort to revive demand in the struggling property sector, the lending rate for first-time homebuyers taking out loans over five years will be reduced from 2.85 % to 2.6 %. China is dealing with a number of economic challenges, according to Pan, as part of broader efforts to” support technological advancement, increase consumption, and promote diverse finance.” Domestic consumption is still poor post-Covid, the once-booming real estate industry is still in trouble, and a global slowdown has more sluggish need for Chinese goods. Beijing has also retaliated against the US’s price increase by imposing 12 % tasks on US goods. China’s manufacturing output decreased last month, which the government blamed on a” sharp shift” in global economic trends, while exports increased sharply by 12 % in March as businesses competed to beat Trump’s most recent tariff round. In light of the growing dangers of a global slowdown and rising business resistance, China has set a 2025 GDP growth target of roughly 5 %, the same as it did last time. Analysts believe the growing impact of trade upheaval may prompt Taiwanese authorities to announce more extreme financial assistance in the months to come despite Beijing’s introduction of several stimulus initiatives last year, including interest rate cuts, eased homebuying restrictions, and debt limit increases for regional governments.
