Published: Wed, October 10, 2018
Hi-Tech | By Grace Becker

China orders more lending to entrepreneurs amid trade spat

China orders more lending to entrepreneurs amid trade spat

The market's obliviousness toward the RRR cut - China's central bank said the move would inject a net 750 billion yuan ($109.2 billion) in cash into the banking system - highlights concerns that monetary easing alone would do little to heal battered confidence.

"In 2008, the Chinese government announced a 4 trillion yuan ($578 billion) stimulus package to fight the impact of the global financial crisis".

With the increase in USA tariffs likely to start "being a drag" on Chinese exports, Fenner said Beijing wants to "shore up and provide some support for domestic demand".

On Monday the State Council, China's cabinet, said it will increase export tax rebates from November 1 and will speed up export tax rebate payments in a new bid to boost the real economy and support trade growth.

The PBOC would "maintain reasonably ample liquidity to drive the reasonable growth of monetary credit and social financing scale", it said.

The fourth RRR cut of the year will cover the yuan deposits of large commercial banks, share-holding commercial banks, city commercial banks, non-county rural commercial banks and foreign banks. These banks traditionally serve the country's big state enterprises.

The move by the People's Bank of China is apparently aimed at prompting financial institutions to lend more money to companies and other entities to bolster consumption and domestic investment, economists say.

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He expected China's headline GDP growth to slow down to 6.6% in the third quarter, from 6.7% in the previous three months, and to 6.4% in the final quarter of the year, Zhang said.

Some traders said the apparent absence of the national team, as China's state-backed funds are known, helped accelerate declines in the afternoon.

Tourism spending by domestic travellers in the first four days of the National Day holiday, which ended on Sunday, rose just 8.1% from past year, which is much less than the 21% growth recorded in 2017, according to figures from the China Tourism Academy. Richard Jerram, chief economist at Bank of Singapore, said while the Fed would not be panicked by the increase in wages "evidence that tight capacity conditions-such as a low unemployment rate-are pushing prices higher will keep them on the current tightening path". China's IT sector fell sharply on Monday, tumbling over 5 per cent as they played catch-up with their Hong Kong peers.

China will also adopt a more proactive fiscal policy, including potential tax cuts on a larger scale, state-run Xinhua News Agency reported on Sunday, citing Finance Minister Liu Kun.

But forecasts in the poll for September's new bank loans ranged widely from 700 billion yuan to 1.6 trillion yuan. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.

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