China’s central bank lowered interest rates on Tuesday after fresh data showed consumer spending and factory output weakening.
It’s the latest effort to nudge the world’s second biggest economy toward growth amid a disappointing rebound from Covid-19-era lockdowns. Officials from the government and central bank are resorting to increasingly desperate measures to revive confidence as the bad news piles up.
In a move that is perhaps more worrying than the poor data itself, the National Bureau of Statistics also announced it would stop reporting youth unemployment figures after they rose every month this year to exceed 20%. It halted the release of a consumer confidence report earlier this year.
Besides the pandemic lockdowns that lasted until late 2022, China is coping with a property bubble that’s deflating. Real estate developer
Country Garden Holdings
(2007.HK) suspended payments on some of its bonds. Authorities are reluctant to go big on new stimulus measures for fear of reigniting a speculative frenzy.
China’s central bank cut a key interest rate on one-year loans on Tuesday, as well as one for one-week borrowing, after a report last week showing the inflation rate turned negative in July.
Other data on Tuesday revealed retail sales and industrial production rose less than expected in July.
The latest measures to get China’s economy back on track are unlikely to be the last. The stakes for the government are high as it looks set to miss its 5% target for economic growth this year, which was already the lowest goal in years.
Write to Brian Swint at [email protected]
Read the full article here
