China cuts rates 0.27 point, 5th reduction in 3 months

Special Report:Global Financial Crisis

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AIMING AT ENOUGH GROWTH

Zhao Quanhou, director of the financial research office of Research Institute for Fiscal Science under the Ministry of Finance, saw the fifth rate cut as a routine movement as the Chinese economic growth is expected to fall significantly in the fourth quarter.

It is aimed to further stimulate the economy, he said, adding such rate cut will probably produce some effect in the first quarter next year and generate an economic turnaround.

The economic stimulus packages announced by the government earlier needs a lot of capital, while lower interest rates will certainly reduce cost of investment, he said to Chinese media.

The Chinese government is expected to further loosen monetary policies since there is still room to cut rates, he added.

Zuo Xiaolei, China Galaxy Securities chief economist, told Chinese media that Monday's rate cut was expected and the move was aimed to make preparations for next year's economic activities.

The U.S. Federal Reserve was slashing its main interest rates and China should also take further movement, she said.

"On one hand, cutting interest rates will encourage private capital to make more investment next year; on the other hand, the government is expected to issue massive bonds next year to support construction investment," she said.

Zuo expected the Chinese central bank to continue rate cuts until mid-2009 and lower the benchmark one-year yuan deposit rate to below one percent.

"If CPI rises remain lower next year, there is much room to further cut the interest rates," she added.

The Chinese economy cooled sharply as growth in exports and property investment slowed. The growth pace was 9 percent in the third quarter, down from 10.4 percent in the first half.

As the economic growth decelerated significantly, the government announced on Nov. 9 a 4-trillion-yuan (585.7 billion U.S. dollars) stimulus package to boost the economy. Last week, it unveiled a real-estate stimulus package that emphasized low-income housing and home ownership.

Economic data released since last week showed further risks of an economic slowdown. The export-driven Chinese economy saw its November exports declining year-on-year by 2.2 percent, the first monthly decline since June 2001.

Amid the global financial crisis, the Chinese government is making every effort to achieve an 8 percent economic growth to create enough new jobs and ensure social stability.

China cuts interest rates, reserve requirement ratio to spur

growth

BEIJING, Nov. 26 (Chinese media) -- China's central

bank has decided to slash the lending and deposit rates by a

bigger-than-expected 1.08 percentage points as of Thursday in the latest strong

effort to stimulate the economy.

The People's Bank of China (PBOC) said on Wednesday it

would cut the benchmark one-year yuan lending rate to 5.58 percent from 6.66

percent and the one-year yuan deposit rate to 2.52 percent from 3.60

percent. Full story

China central bank cuts interest rate,

reserve requirement to stimulate economy



BEIJING, Oct. 8 (Chinese media) --

China's central bank on Wednesday announced cuts in both the interest rate and

reserve-requirement ratio in the latest effort to boost the domestic economy

amid worries over the deepening global financial crisis.

The deposit and lending rates would be lowered by 0.27

percentage points from Thursday and the reserve-requirement ratio would be down

by 0.5 percentage points from Oct. 15, the People's Bank of China (PBOC) said.

Full story

China's 4 trillion yuan stimulus to

boost economy, domestic demand

BEIJING, Nov. 9 (Chinese media) -- China said on Sunday it will

loosen credit conditions, cut taxes and embark on a massive infrastructure

spending program in a wide-ranging effort to offset adverse global economic

conditions by boosting domestic demand.

This is a shift long advocated by analysts of the

Chinese economy and by some within the government. It comes amid indications

that economic growth, exports and various industries are slowing. Full story

China central bank cuts interest rate,

reserve requirement to stimulate economy

BEIJING, Oct. 8 (Chinese media) -- China's central bank on

Wednesday announced cuts in both the interest rate and reserve-requirement ratio

in the latest effort to boost the domestic economy amid worries over the

deepening global financial crisis.

The deposit and lending rates would be lowered by

0.27 percentage points from Thursday and the reserve-requirement ratio would be

down by 0.5 percentage points from Oct. 15, the People's Bank of China (PBOC)

said. Full story

China's central bank reduces credit

interest rate, reserve requirement ratio

BEIJING, Sept. 15 (Chinese media) -- China's central bank said on

Monday it would reduce the benchmark loan interest rate and the reserve

requirement ratio for commercial banks to ensure a steady and rapid economic

growth.

The benchmark interest rate for one year yuan denominated

loans will be adjusted down 0.27 percentage points from Tuesday, its first

downward movement since October 2004. Full story