Why It MattersA reduction in the deposit rates is one lever that policymakers can use to stimulate spending.
The hope is that the lower rates will give consumers an incentive to spend or invest money instead of parking their savings in the bank.
After China scrapped its Covid restrictions late last year and reopened the economy, there were expectations that pent-up demand would push consumers to start spending freely — but that has not played out in many sectors of the economy.
In the first three months of the year, China’s economy grew at 4.5 percent, helped by a pickup in spending on dining out and luxury goods.
Betty Rui Wang, senior China economist at the Australia-based bank ANZ, said confidence in the economy is weak across Chinese households and private-sector businesses.
Persons:
Larry Hu, Betty Rui Wang, “, ”, Wang, Li You
Organizations:
China, Macquarie Group, People’s Bank of China, ANZ, Communist, Commerce
Locations:
China, Australia, Beijing