Slowdown in China

This week China loosened its monetary policy in a bid to stave off a sharp economic slowdown. The Chinese central bank cut its one-year benchmark interest rate by 0.25 percentage points to 4.35%. The central bank also cut the ratio of Chinese currency it expects banks to hold. These moves are being made to help the economy hits its 7% growth target for this year. Along with the moves made this week, the Chinese government has made a series of economic policy changes in the past few years including launching the China International Payments System. The Chinese economy which has grown at breakneck 10% annually for most of the last 30 years has been experiencing a gradual slowdown in the past few years. This transition to a more sustainable growth path, although gradual, is causing plenty of worry in the ruling communist party which promises growth and prosperity to the Chinese people in return for political power.

Leave a Reply

Your email address will not be published. Required fields are marked *