China's Central Bank Unveils New Economic Measures

China's central bank has initiated significant monetary policy adjustments, including a 50 basis point cut in interest rates and a reduction of the reserve requirement ratio to stimulate economic growth and stabilize the struggling property market. The People's Bank of China (PBOC) aims to lower existing mortgage rates and reduce the minimum down payment for second-home mortgages from 25% to 15%, potentially benefiting 150 million households. Despite these measures being the most substantial since the early pandemic, analysts express skepticism about their sufficiency in achieving the government's ambitious 5% GDP growth target, citing weak consumer and business credit demand. The PBOC's actions include injecting up to 1 trillion yuan ($142 billion) into the financial system to bolster liquidity. However, concerns persist regarding the effectiveness of these measures in reversing the ongoing economic slowdown, as recent data indicate a slump in consumer confidence and business profitability.