Special Report: Global Financial Crisis
BEIJING, Oct. 29 (Xinhua) -- China's central bank, the
People's Bank of China (PBOC), announced on Wednesday it would cut benchmark
interest rates by 0.27 percent to spur economic growth as of Oct. 30.
The benchmark one-year deposit rate would drop to
3.60 percent from 3.87 percent, while the benchmark one-year lending rate would
fall from 6.93 percent to 6.66 percent.
This is the second such move in less than one month,
highlighted the government's rising concern over the slowing economy and
slumping capital market.
The previous was on Oct. 8, when the PBOC announced
to cut deposit and lending rates was lowered by 0.27 percentage points and
decided to cut the reserve-requirement ratio by 0.5 percentage points from Oct.
15.
"It reflects that the government is worried about a
cooling down economy and other domestic problems, amid a deepening
U.S.-originated world credit crisis, " said Tang Min, China Development Research
Foundation deputy secretary.
China's gross domestic product (GDP) grew to 20.16
trillion yuan (2.96 trillion U.S. dollars) in the first three quarters of this
year, up 9.9 percent from the same period of last year.
The growth rate was 2.3 percentage points lower than
the same period of last year, and half a percentage point lower than the first
half.
"This was also a timely response to the rate cuts by
other central banks worldwide and part of a coordinated effort to stem the
global financial crisis, " said Tang.
The recent intensification of the financial crisis
has augmented the downside risks to growth and thus has diminished further the
upside risks to price stability, experts say.
Tang added, the easing in inflation has given room
for the authorities to loosen monetary policy. Inflation is no longer a threat
with the declining commodities prices.
China's consumer price index (CPI), the main gauge of
inflation, rose 4.6 percent in September over the same period last year, off
from the 12-year high of 8.7 percent in February.
"A lower interest rate will help domestic enterprises
to cut business costs, and boost economic development. This is in line with the
country's expectation," Tang noted.
Zhuang Jian, senior economist with Asia Development
Bank echoed with Tang, saying a relaxed credit and financing environment is a
key factor to enlarging domestic demand and boost consumption.
"Maintaining a fast and sound economic development is
the government's top priority currently," Zhuang added.
However, Zhuang noted, monetary policy alone was not
enough to boost domestic economy in the long term. Other fiscal policies were
also very important.
Guo Tianyong, director of banking research center
with Central University of Finance and Economics said, this move was also
contribute to rebuilding people's confidence over the poorly-performing domestic
stock market and real estate market.
China's stock market dropped more than 66 percent
from its peak last October, while real estate prices continue to fall in recent
months.
Last week, China announced an array of policies,
including tax exemption and mortgage deposits reduction, to boost the falling
real estate sector amid the global economic slowdown.
The interest rates on a mortgage for first time home
buyers was cut by 0.27 percentage points as of Oct. 27. The floor for interest
rates would be lowered to 70 percent of the central bank's benchmark rate, the
central bank said.
China central bank cuts interest rate,
reserve requirement to stimulate economy
BEIJING, Oct. 8 (Xinhua) -- 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.
China balances growth and
inflation
BEIJING, Oct.2 (Xinhua) -- Seeing fully loaded trucks
drive steadily away from the warehouse, Cheng Yongchang uttered a long sigh of
relief. Despite dripping with sweat from the hot weather, the general manager of
a South China toy producer would frequently feel waves of chills from a "winter
of foreign trade."
Small- and medium-sized enterprises (SMEs) in South
China's Pearl River Delta, the world's workshop, are facing a critical period of
trying to survive the current global economic slowdown.
China's central bank reduces credit
interest rate, reserve requirement ratio
BEIJING, Sept. 15 (Xinhua) -- 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.
