Overview

• The People’s Bank of China has cut short-term interest rates and reduced the reserve requirement ratio by 0.5 percentage points, unlocking approximately $137 billion in liquidity.
• Restrictions on auto financing firms were lifted, and banks were encouraged to lend to strategic sectors like scientific innovation and elder care.
• These measures aim to counter the economic strain caused by U.S. tariffs on Chinese goods, now at 145%, and China's retaliatory tariffs of up to 125%.
• China reported a sharp slowdown in manufacturing activity, driven by a significant drop in new export orders, highlighting weak global and domestic demand.
• High-level trade talks between U.S. and Chinese officials are set to take place in Geneva this week, marking the first formal dialogue since the latest tariff hikes.