Chinese economy: Beijing eases constraints on its banks

The central bank of China in Beijing, photographed Thursday January 20, 2022. AP - Andy Wong

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The Chinese People's Bank, the central bank, lowers the reserve requirement rate for banks, which corresponds to the share of deposits that they must keep in their coffers.

This measure aims to reduce the pressure on financial institutions to encourage them to grant more credit on more attractive terms to companies, and thus support the economy.

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The current situation of the Chinese economy contrasts sharply with that of last year.

Beijing is due to announce the growth figure for the first quarter on Monday, April 18.

Despite the strict confinement in Shanghai and in several regions, which penalizes activity, experts are counting on a slight rebound.

They predict a 4.3% increase in GDP over one year in the first quarter, against 4% the previous quarter. 

Last year, thanks to a dynamic recovery in demand in China, the country recovered quickly from the health crisis.

In 2021, it posted a GDP increase of 8%, and 2022 was announced under the best auspices.

But that was without counting on a new outbreak of the Covid.

To counter it, a whole series of drastic measures and confinements followed, including 25 million inhabitants in Shanghai, the economic capital.

As the economy slows down, Beijing is planning a 5.5% increase in GDP this year, the lowest in twenty years, excluding the Covid period.

This forecast leaves analysts skeptical;

they doubt that China can do it.

►Read also: In Shanghai, the discontent of residents exhausted by the “

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• China

• Economy

• Economic crisis