The measures came shortly after US and mainland officials said US Treasury Secretary Scott Bessent and chief trade negotiation Jamieson Greer will meet with China’s top economic official He Lifeng in Switzerland this weekend for talks, paving the way for a potential de-escalation between the two sides.
Speaking in a press briefing in Beijing, People’s Bank of China governor Pan Gongsheng said the central bank will lower the borrowing cost of its seven-day reverse repurchase rate, its benchmark interest rate, by 10 basis points, to 1.4 percent, effective on Thursday.
The central bank, he added, will also reduce the amount of cash that banks must hold in reserve, also known as the reserve requirement ratio (RRR), by 50 basis points from May 15, which will inject a trillion yuan in liquidity into the market.
Other measures include lowering the mortgage rate by 25 basis points, scrapping the RRR for auto financing firms, a new 500 billion yuan relending tool to support service consumption and elderly care, as well as increased funds for factory upgrades and other innovative projects.
“[For example,] relending funds for factory upgrades and other innovations currently involve a quota of 500 billion yuan,” said Pan.
“So we will increase this by 300 billion yuan to a total of 800 billion yuan, to support our ‘two new’ policies of upgrading large-scale equipment and trading-in of consumer goods.”
Separately, Li Yunze, director of the National Administration of Financial Regulation (NAFR), said authorities will soon introduce a package of financing policies to help stabilise the property market and support small and micro companies as well as private entities.
Li said there will be “tailor-made services” for business entities that are significantly affected by tariffs and that these will ensure all foreign trade enterprises are able to access financial support and necessary loans with increased capital support.
“Capital replenishment work for large commercial banks is being accelerated…,” Li said in explaining about the increased funding work.
“Different regions are also replenishing capital for small and medium-sized financial institutions through multiple channels.
At the same event, China Securities and Regulatory Commission chairman Wu Qing said that despite pressure from US tariffs, markets have stabilised following intervention efforts by the authorities.
Wu also noted that Beijing would continue to support state-owned investment company, Central Huijin, to further stabilise the A-share market, which he said is “currently undervalued” and has room for gains.
He added the country planned to help facilitate the return of foreign-listed Chinese firms to mainland and Hong Kong stock markets.
Separately, Wu singled out US investor Warren Buffett, who is set to retire this year, for mention for his fundamental principles of long-term value investing and rational investing, noting that such principles and efforts to reward investors will not end with the retirement of the investment legend.
