2024-09-25 02:09:40
China’s central bank has announced a comprehensive package of measures to stimulate the country’s economy. However, experts still see room for improvement.
The Chinese central bank wants to stimulate the country’s economy with a comprehensive package of monetary policy measures. Central bank governor Pan Gongsheng announced on Tuesday, among other things, a reduction in the minimum reserve for banks, as well as interest rates for existing real estate loans and relief on down payments for real estate. This is intended to boost consumption and ease the crisis in the real estate sector.
China’s economy has still not recovered from the strict measures taken to combat the coronavirus pandemic. Domestic consumption is weak, the real estate industry is in crisis and unemployment is high, especially among young people. The authorities are expecting economic growth of around five percent this year, which is relatively low for China and, according to experts, may not even be achievable.
According to the central bank, the mandatory minimum reserve for banks, i.e. the requirement for how much cash they must hold, is now to be reduced. The rate will be “reduced by 0.5 percentage points very soon,” said Pan. This will enable banks to grant more loans to companies, which will allow an additional one trillion yuan (around 128 billion euros) to flow into the financial market.
In addition, according to the central bank, interest rates on existing real estate loans are to be reduced. This will benefit “50 million households and around 150 million people” and stimulate consumption and investment, the central bank governor stressed. An equity fund is also planned to stabilize the stock markets.