BEIJING—China’s central bank on Monday cut a key interest rate in an attempt to counter the post-Covid growth slowdown in
Activity has been dragged down recently by uncertainty in the labor market and global economic sluggishness, weakening demand for Chinese goods.
The decision is intended to encourage commercial banks to grant more loans and at more advantageous rates. In another sign that the recovery is faltering, loans to households fell last month to their lowest level since 2009. The move “can even backfire if market participants interpret these easing measures as policymakers’ unwillingness to deliver even moderate policy stimulus”, wrote Wei.Traders appeared unimpressed with the move, with Hong Kong stocks down 1.4 percent and Shanghai off 0.6 percent.
In addition to the real estate woes, growth is also hampered by sluggish consumption amid uncertainty in the labour market and a global economic slowdown.China suspended the monthly publication of its detailed youth unemployment figures last Tuesday, after it hit a record high of 21.3 percent in June, according to official data.
Authorities have instead announced various steps to boost the private sector, which was hit particularly hard during the pandemic, and consumption, though they have yet to take effect.
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