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  • By The Financial District

China Cuts Interest Rates As Economy Weakens

China’s central bank trimmed a key interest rate Monday, August 15, 2022, to shore up sagging economic growth at a politically sensitive time when President Xi Jinping is trying to extend his hold on power, Joe McDonald reported for the Associated Press (AP).


Photo Insert: The People’s Bank of China cut its rate on a one-year loan to 2.75% from 2.85% and injected an extra 400 billion yuan ($60 billion) into lending markets after growth in factory output and retail sales weakened in July and home sales fell by double digits.



The decision suggested Beijing is temporarily setting aside worries over high debt to act to head off a slump before Xi is expected to try to award himself a third five-year term as Communist Party leader at a meeting this fall.


The ruling party has effectively acknowledged it cannot hit this year’s official 5.5% growth target after anti-virus curbs disrupted trade, manufacturing, and consumer spending.



A crackdown on excessive borrowing in China’s vast real estate industry triggered a plunge in home sales and construction.


“The momentum of economic recovery has slowed,” a government spokesman, Fu Linghui, said at a news conference. “More efforts are needed to consolidate the foundation of economic recovery.”


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

The People’s Bank of China cut its rate on a one-year loan to 2.75% from 2.85% and injected an extra 400 billion yuan ($60 billion) into lending markets after growth in factory output and retail sales weakened in July and home sales fell by double digits.


The slowdown adds to political headwinds for Xi, China’s most powerful leader since at least the 1980s. He still is widely expected to succeed, but some analysts say he might be forced to compromise by sharing more of his sweeping powers with other party leaders.



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