China has cut a crucial lending rate in an effort to shore up growth as the world’s second-biggest economy is buffeted by repeated coronavirus lockdowns and a worsening property crisis, reports the Financial Times. The People’s Bank of China on Monday reduced its medium-term lending rate, for one-year loans to the banking system, by 10 basis points to 2.75%, the first cut since January. Analysts had expected the central bank to leave the rate unchanged.
The decision highlighted deepening anxiety in Beijing as it tries to combat a decline in consumer demand triggered by its drawn-out zero-COVID policy, as well as the fallout from cash-strapped property developers and slowing global growth.
Official statistics released on Monday reflected worse than expected consumer and factory activity and a rise in youth unemployment to a record 19.9%, piling more pressure on Xi Jinping’s administration to reinvigorate the economy.