China Shifts to Stimulus Mode With Xi’s Options Dwindling
- PBOC unexpectedly cut its short-term policy interest rate
- Beijing also weighing broader stimulus package to spur growth
China is ramping up stimulus to boost its faltering economy, although soaring debt levels and concerns about financial stability mean the measures are likely to be limited compared with support packages in previous downturns.
The People’s Bank of China unexpectedly cut a series of short-term interest rates on Tuesday, paving the way to lower a key longer-term policy rate on Thursday. In addition to these monetary policy actions, officials are considering a broad package of stimulus proposals, which include support for areas such as real estate and domestic demand, according to people familiar with the matter.