China's Surprise Rate Cut

New attempts to stimulate lending
Pedestrians in the financial district in Shanghai. In a surprise move, the central bank lowered rates for the second time in under a month Photograph by Philippe Lopez/AFP/Getty Images

Just one week before China’s second-quarter GDP number is to be released, the People’s Bank of China has cut interest rates again, the second time in less than a month. The surprise move signals that policy makers are worried about the prospect of a hard landing for the world’s second-largest economy, as growth continues to decelerate and two recent surveys show manufacturing growth slowed in June.  First-quarter growth was 8.1 percent, the slowest rate in almost three years. Earlier, investment banks had already lowered their estimates for second-quarter growth, with Bank of America expecting 7.5 percent and Crédit Agricole Corporate & Investment Bank as low as 7 percent.

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