China's central bank today announced it will cut benchmark interest rates by a surprising 1.08 percentage points, much more than its normal cuts. China Daily reaches several economists for their comments on the impact of the move.
Zhuang Jian: senior economist, Asian Development Bank, Beijing
The huge rate cuts show that the authorities are seriously concerned about the economic slowdown as most of the economic indicators are indicating worrisome prospects.
Although the country released a massive US$586 billion stimulus package early this month, people's confidence remains weak as they are not sure to what extent the plan will work. The stock market's lackluster performance this week also reflects the uncertainty of investors.
After the adjustment in both interest rates and banks' reserve requirement ratio, investor and consumer confidence would improve and help stabilize the overall economy. If the national stimulus policies are implemented well, it will not be a problem for China to maintain an annual growth rate of 8 percent next year.
