President Xi Jinping has resisted pulling the trigger on a major stimulus to revive the world's second-biggest economy. The grim market reaction to a surprise rate cut shows investors want to see him take much bolder steps.
The People's Bank of China (PBOC) on Tuesday lowered the rate on its one-year loans-or medium-term lending facility-by 15 basis points (bps) to 2.5%, the steepest cut in three years. The move came shortly before the release of July data that showed weak consumer spending growth, sliding investment and rising unemployment.
Zooming out, the economic picture looks even worse. Bank loans plunged to a 14-year low last month, while deflation is setting in and exports are contracting. One of China's largest property developers is at risk of default and a financial conglomerate with 1 trillion yuan ($138 billion) under management missed payments on investment products, stoking fears about possible contagion.
All of that is adding pressure on Xito do more in two areas he has sought to avoid: Helping out the heavily indebted property sector and giving consumers more cash to spend something an adviser to the PBoC this week called "the most urgent goal".
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
India in economic sweet spot, inflation to moderate: Moody's
India's economy is in a sweet spot and its inflation is expected to moderate despite a temporary spurt, Moody's said, projecting optimism about the country's growth prospects despite recent underwhelming data.
Incentive engine to drive modern ships
Subsidies for green, high-tech ships under ₹18,000 cr policy
Cement firms wage war on costs as competition soars
India's cement makers who once flexed their pricing muscles are caught in a bruising price war, eroding margins at a time of rising demand.
Saudi Arabia doesn’t have enough money for its futuristic city
The giant futuristic planned city of Neom is proving a headache for Saudi Arabia. Costs are up, schedules are delayed, and in recent days the world’s largest construction project replaced its chief executive of six years.
EV adoption is a marathon, not a sprint: Audi India
The slowdown in electric vehicle (EV) sales is temporary, and the industry will grow over time, Audi India head Balbir Singh Dhillon said, pointing to the need for extensive charging networks and supportive government policies.
India's trade gap with China soars in Apr-Oct
The country's green transition increases reliance on Chinese imports
14 nations eye India's generic drug model
Countries will specify their requirements, with HLL and MEA coordinating with them for the pharma exports
India urges $1.3 tn annual climate grant
Intervening on behalf of like-minded developing countries (LMDCs), India said that developed countries need to commit to provide and mobilise at least $1.3 trillion every year in the New Collective Quantified Goal (NCQG) till 2030.
Over 600 mn cyberattacks daily, AI can secure devices
Microsoft is developing a password-free authentication process to eliminate the risk of breaches
Small businesses ramping up cybersecurity, thanks to AI
Rising AI adoption is helping cybersecurity providers hike their marketable base in India
