China has announced a mix of tax cuts and infrastructure spending citing “uncertainty”, as it ramps up efforts to stimulate demand and counteract a weakening economy.
The move, announced late Monday, came hours after the injection of $74bn into the banking system by the People’s Bank of China through its Medium-term Lending Facility — the central bank’s largest-ever single-day cash injection using that tool. The measures provide growing evidence that policymakers are concerned about how the trade war with the US will exacerbate a domestic slowdown and follow a series of monetary loosening actions in recent weeks.
The PBoC has already cut the required reserve ratio (RRR) for some banks three times this year in a bid to boost the money supply.