Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

China’s central bank cuts bank reserve rates, pledges other moves to help the economy

Share

BEIJING – The Chinese central bank announced Tuesday a slew of measures aimed at reviving the sluggish economy, mainly by tackling a downturn in the property sector.

People’s Bank of China Gov. Pan Gongsheng said the reserve requirement for banks would be cut by 0.5 percentage points and that the central bank would follow up with further cuts. That would free up more money for lending.

The news lifted share prices, especially for real estate developers. Hong Kong’s Hang Seng index jumped 2%, while the Shanghai Composite index was up 0.8%.


FILE - Construction cranes are seen near the central business district in Beijing, Aug. 8, 2024. (AP Photo/Ng Han Guan, File)
FILE – Construction cranes are seen near the central business district in Beijing, Aug. 8, 2024. (AP Photo/Ng Han Guan, File)

The central bank plans new policies to support stable development of the stock market, Pan told reporters in Beijing.

He also said down payment requirements for buyers of second homes would be reduced to 15% from 25% and that mortgage rates would be cut by about 0.5% .

That would help 50 million households and 150 million people, reducing household interest expenses by an average of about 150 billion yuan ($21 billion) a year, he said.

The latest moves to support the economy mainly center on addressing a crisis in the housing market after authorities cracked down on excessive borrowing by developers, leading many to default on their debts.

Housing is a main form of investment in China and it also supports many other industries, such as construction, home decorating and home appliances, among others.

Regulators have avoided the kind of massive government spending stimulus Beijing used in the past to rev up growth, wary of creating a property market bubble. But disruptions and job losses during the COVID-19 pandemic, coupled with falling prices for homes have left many Chinese unwilling or unable to spend, sapping the economy of other engines driving business activity.

The economy grew at a 4.7% annual rate in the last quarter after expanding 5.3% in the first three months of the year. Recently, Chinese leader Xi Jinping urged officials to do more to get growth back on track.

“Given President Xi’s recent call for policymakers to strive to achieve the growth target, we’ve been expecting increased urgency for policy support rollout,” economists at ING said in a report.

___

AP researcher Yu Bing in Beijing contributed.