Emergency situations call for quick intervention, and nowhere is this more true than in the Chinese government’s playbook. Yesterday the People’s Bank of China lowered lending and deposit interest rates each by 0.27 percentage points (those magical multiples of nine again!) to keep up confidence in the economy, the third such tinkering in the last six weeks. They aren’t alone, of course – central banks in the US, Europe, Japan and the UK are all expected to continue cutting rates as well. Bank of China might not be too pleased at the even-cheaper lending rates, as it has its own loan mess to clean up. It just allocated an extra US$832 million to cover bad debts in the third quarter after its US$3.8 billion in losses for the first nine months of this year outstripped the money it had set aside to deal for such crises by a good 28%.
China’s insurance regulator stepped in a couple weeks ago to order domestic insurance companies to put more money into the A-share market to help prop it up, we learn from a report in the Financial Times. It still isn’t a great time to be doing share sales, though: Yanjing, China’s third-largest beer brewer, had to drop the price for its planned private share placement by 44% to help gin up interest in its shares, which have dropped in value 55% so far this year.
Foreign courier companies are reacting to a new draft postal law that would forbid them from delivering letters on the mainland, but only vocally for now. And as third-quarter earnings reports continue to roll in, China’s two largest oil companies posted sharply contrasting results.