China's Strategic Interest Rate Reform: A 2025 Vision

China's central bank signals potential interest rate cuts in 2025 to stimulate economic growth. Shifting focus from quantitative objectives to rate adjustments, policymakers aim to boost lending amidst trade tensions with the U.S. President Xi Jinping anticipates proactive growth policies for China's 2024 GDP achievements.

China's central bank has announced the potential for an interest rate cut from the current 1.5% level by 2025, according to the Financial Times. Prioritizing interest rate adjustments over quantitative goals, the People's Bank of China embarks on an extensive interest rate reform mission described as 'arduous' by government advisors.

In a December economic meeting, top leaders committed to reducing interest rates and bank capital reserves, aiming to stimulate lending and investment. This initiative is part of a broader strategy to counteract the negative impact of increasing trade tensions with the U.S. amidst Donald Trump's return to the White House.

Facing a manufacturing-dependent economy and struggling domestic demand due to a property market crisis, China plans to enhance fiscal stimulus. President Xi Jinping projects the 2024 GDP to surpass 130 trillion yuan and outlines more aggressive growth policies for 2025 to ensure economic resilience.

(With inputs from agencies.)