People’s Bank of China cut its official interest rate yesterday from 2.85% to 2.75% and injected $60Bn into the system after weaker than expected economic data. Real estate, a big component of the Chinese economic growth is showing signs of weakness. At its peak, it accounted for more than 30% of the economy and 60% of Chinese households assets. Coincidently, the #ustreasury just published data on international capital flows where it can be seen that China has been reducing its #ust holdings over the last 7 months, to $967Bn, after holding more than $1.3Tn in 2013. China is one of the very few (3?) economies in the world that is easing rates, to fight a slowdown after zero Covid policy. This is very important as China represents roughy 20% of global gdp growth.
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