Sunday, September 14, 2025

China Unexpectedly Cuts Rates Amid Weakening Economy

China, which plays an important role in upholding the global economy, appears to be suffering from a demand slump. Latest data shows the country’s retail and factory activity unexpectedly slowed last month, prompting the central bank to abruptly cut its two key lending rates in an effort to revive the economy.

The world’s second largest economy reported weaker-than-expected data for July, as Covid-19 restrictions and the concurrent real estate slump hindered growth. The National Bureau of Statistics reported that retail sales increased 2.7% year-over-year in July, substantially below the 5% expected by economists polled by Reuters and lower than the 3.1% reported in the month prior. Likewise, industrial production rose 3.8% from July 2021, down from June’s 3.9%, and also missing forecasts calling for an expansion of 4.6%.

At the same time, investment in China’s property market declined at a faster pace in July compared to June, as fixed asset investment in the first seven months of 2022 increased only 5.7% from the same period one year ago. “The July data suggest that the post-lockdown recovery lost steam as the one-off boost from reopening fizzled out and mortgage boycotts triggered a renewed deterioration in the property sector,” said Capital Economists senior China economist Julian Evans-Pritchard.

In an effort to help the economy overcome the recent slump, the People’s Bank of China slashed both its seven-day and one-year interest rates by 10 basis points. But, despite the updated monetary policy move, households and businesses are hesitant to borrow following Covid-19 restrictions. “The rate cut shows the entire economy is in trouble,” said Iris Pang from ING Groep NV. The central bank also withdrew some cash from the banking system, selling US$59.3 billion worth of yuan.

“Usually the Chinese economy has been an important pillar in supporting the global economy. This time, the US and Europe are showing signs of slowing and possibly moving into a recession but the backdrop— China— isn’t there to support the global economy,” explained WisdomTree macroeconomic research director Aneeka Gupta as cited by the Financial Times.


Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Soma Gold Q2 Earnings: Production Drops Amid Growth Effort

Guanajuato Q2 Earnings: Things Are Going Backwards

Electric Metals: The Sole US Domestic Source Of A Critical Mineral?

Recommended

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Goliath Resources Hits 18.58 g/t Gold Over 5.00 Metres At Surebet

Related News

Google Shuts Down 11,000 State-Linked Propaganda Channels

Google shut down approximately 11,000 YouTube channels and associated accounts during the second quarter of...

Friday, July 25, 2025, 04:26:00 PM

US Unemployment Rate Dips to 3.6% in June

Latest data from the Bureau of Labour Statistics shows that job creation in the US...

Friday, July 7, 2023, 08:51:20 AM

Is This How China Will ‘Solve’ Its Record Youth Unemployment?

China’s youth unemployment rate has reached an all-time high, doubling in the past four years...

Thursday, June 22, 2023, 03:10:00 PM

Canadian MP Lashes Out On Trudeau For Not Alerting Him Of Chinese Threats To His Family

Michael Chong, a member of Canada’s main opposition Conservative party, claimed on Monday that the...

Tuesday, May 2, 2023, 07:31:00 AM

Americans Are Drowning In Credit Card Debt Thanks To Rising Interest Rates

Americans are increasingly relying on borrowing money to make ends meet. So much so, that...

Saturday, February 4, 2023, 03:24:00 PM