Beijing eases lending to offset slowing economy

China’s central bank cut the required reserve ratio for its biggest banks by 50 basis points on Saturday, freeing an estimated RMB400 billion (US$63.5 billion) in new loans to head off an unexpectedly rapid decline in the country’s economy, Reuters reported. The cut – China’s third in six months – will be effective starting May 18. Analysts said the move was a response to economic data for April, released last Friday, which showed the country’s economy slowing faster than expected. Industrial production weakened sharply and fixed asset investment – China’s main growth driver – hit its lowest level in nearly a decade. Import and export growth were also far lower than expected in April, underlining China’s vulnerability to weakening global demand for its products. Bank lending in April came in at RMB681.8 billion (US$108.04 billion), below a consensus forecast of RMB800 billion.