China announces raft of policy measures to prop up slowing economy

Move comes amid deflationary pressures that threaten country's growth target

- Joyce ZK Lim

China's financial regulators have announced a broad raft of measures to support a slowing economy, aimed at boosting liquidity and lowering borrowing costs for individuals and companies alike.

This comes as protracted deflationary pressures weigh on the world's second-largest economy, and threaten to put the country's growth target of around 5 per cent in 2024 out of reach.

The measures include cuts to a key policy interest rate and existing mortgage rates, reductions to banks' cash reserve requirements, lower down payments for second homes and more liquidity for the stock market.

They were announced on Sept 24 at a rare press conference in Beijing by central bank chief Pan Gongsheng, alongside the heads of the National Administration of Financial Regulation and the China Securities Regulatory Commission.

The coordinated policy salvo, the magnitude of which exceeded expectations, "will give an immediate lift to sentiment, which is a positive first step", said Mr Xu Tianchen, a senior economist at the Economist Intelligence Unit in Beijing. "This at least suggests that the government is serious about backstopping the economy and protecting the livelihoods of people," he added.