China has introduced a series of stimulus measures aimed at accelerating economic growth and stabilizing the property market. The People's Bank of China (PBOC) has implemented significant policy adjustments, including reducing the cash reserves banks are required to hold.
Experts view these measures as a strong indication of the Chinese government's commitment to maintaining economic stability. A report by the Chinese think tank CF40 highlights that the PBOC's actions are designed to support not only economic growth but also the stock and real estate markets.
CF40 anticipates a decline in overall interest rates, noting that this approach is more effective in fostering economic stability compared to merely lowering reserve requirement ratios. Additionally, the PBOC's decision to reduce mortgage rates for existing loans is expected to enhance household cash flow and stabilize household credit levels.
Lynn Song, chief economist for Greater China at ING, commented on CNBC that the comprehensive nature of these measures represents a \"step in the right direction.\" Song emphasized that the simultaneous implementation of multiple policies is more impactful than isolated, piecemeal adjustments.
Eswar Prasad, an economics professor at Cornell University, told the Financial Times that the PBOC's actions, though \"quantitatively modest,\" are symbolically significant. He believes these measures demonstrate the government's willingness to employ macroeconomic stimulus to support slowing economic activity.
Overall, most analysts agree that the PBOC's latest initiatives have surpassed expectations and are likely to enhance market confidence in the short term.
Reference(s):
cgtn.com
