China has not been in such trouble for decades

Instead of the originally planned 5.5 percent expansion, it may even happen that the economy grows by only around 3 percent, which may be the lowest growth rate in four decades, if we do not take into account 2020, the first year of the coronavirus epidemic. According to analysts, in order to stimulate the economy, it is mainly to loosen the zero Covid policy that applies strict closures.

On Monday, China’s central bank unexpectedly reduced the interest rate of the lending instrument provided to the banking system in order to stimulate demand for loans and thereby give impetus to the economy, which is suffering from closures caused by the zero Covid policy, and suffering from serious problems in the real estate market. According to the interest rate cut, the interest rate on loans granted to certain financial institutions from the one-year medium-term credit facility (MLF) worth 400 billion yuan ($59.33 billion) was reduced by 10 basis points to 2.75 percent. The interest rate cut for the second time this year regarding the MLF surprised the markets, as a survey of 32 analysts last week unanimously predicted that the central bank would leave the rate level unchanged.