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Published on : Oct 08, 2018

On Sunday, China cut their reserve-required rate due to the ongoing trade war between China and the United States. It seems that China is getting a little nervous due to the current changes taking places. However, last month it insisted that it is not afraid of the trade war and is highly resilient.

An official from China’s securities regulator said that President Trump’s administration could do much that can have a significant impact on the Chinese economy. Vice chairperson of the China Securities Regulatory Commission, Fang Xinghai said that the worst that can come is the U.S. can impose levies on all Chinese imports, but can only hurt up-till 0.7% points of the country’s growth. 

Although China’s situation is not very healthy, the central bank has made an effort to reduce pressure on the banking sector.

According to an independent analyst, Fraser Howie states currently China is facing the worst time since the global financial crisis. He added by saying, they might deny any situation or talks of panic but actually they also know it is not the usual business in China.

The reduced RRR will in turn, increase the injection in the economy by US$109.2 billion in cash into the banking systems.  However, they did maintain their monetary policy, which is still neutral and prudent and not accommodative.