A China Resources property under construction in Nanjing, Jiangsu province, China, Sept 24, 2024.
Cfoto | Future Publishing | Getty Images
BEIJING — China’s slowing economy needs more than interest rate cuts to boost growth, analysts said.
The People’s Bank of China on Tuesday surprised markets by announcing plans to cut a number of rates, including that of existing mortgages. Mainland Chinese stocks jumped on the news.
The move may mark “the beginning of the end of China’s longest deflationary streak since 1999,” Larry Hu, chief China economist at Macquarie, said in a note. The country has been struggling with weak domestic demand.
“The most likely path to reflation, in our view, is through fiscal spending on housing, financed by the PBOC’s balance sheet,” he said, stressing that more fiscal support is needed, in addition to more efforts to bolster the housing market.
The bond market reflected more caution than stocks. The Chinese…
