People’s Bank Chinese (English abbreviation PBOC) announced on Tuesday that it has surprisingly cut the one-year bank lending rate by 15 basis points to 2.5%, the lowest level since 2020, in an effort to boost the national economy. the economy was hit by the real estate crisis and the decline in consumption.
This is the second cut the agency has undertaken since June, and the first under the authority of the new governor Pan Gongsheng, which he took over from Yi Gang after his retirement. The Central Bank also lowered the short-term interest rate by 10 basis points.
This unexpected decision was made on the same day that the Asian country’s Office for National Statistics (ONE) released several macroeconomic data pointing to a slowdown in the national economy.
Thus, Chinese industrial production increased by 3.7% year-on-year in July, compared to the 4.4% growth observed in the previous month and below the forecast by analysts. At the same time, retail sales rose 2.5% in the seventh month of the year, six-tenths lower than in June and the lowest increase since the end of 2022.
In its statement, ONE emphasized that: China’s economy continues to recover, “The international political and economic situation is complex and domestic demand is still insufficient.”
“It is necessary to continue to solidify the foundations of economic recovery (…) We must intensify the role of macropolitics in regulating the economy and make concrete efforts to expand domestic demand, strengthen confidence and avoid risks,” the China Bureau says. Statistics.
One of the main risks to the Chinese economy is the real estate sector, as evidenced by the problems experienced by contractor Country Garden, which is in the news these days due to the sharp correction in its actions.
The company has assured that since 2021, “the industry has entered a period of unprecedented difficulties with many adverse factors in the market causing serious problems for sales and financing”.
Like this, Country Garden’s problems are wreaking havoc once again. Real estate Chinese Only two years after the challenges of another giant like Evergrande began.