<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-820x461.jpeg" alt="" class="wp-image-544690" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107077973-1655689250819-gettyimages-1402870855-vcg111387492036-1.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">China’s central bank supplied 14-day cash to its banking system for the first time in months on Monday and at a lower interest rate, signaling its intent to further ease monetary conditions. Jiang Qiming | China News Service | Getty Images</figcaption></figure>



China on Monday lowered its main benchmark lending rates by 25 basis points at the monthly fixing.



The one-year loan prime rate (LPR) has been cut to 3.1%, while the five-year LPR has been trimmed to 3.6%, the People’s Bank of China (PBOC) said.



The one-year LPR influences corporate loans and most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.



The move was expected. China’s central bank governor Pan Gongsheng had indicated on Friday during a forum held in Beijing that the loan prime benchmark rates would be lowered by 20 to 25 basis points.



During the forum, Pan also said that the amount of cash that banks need to have on hand, also known as the reserve requirement ratio or RRR, could be lowered by another 25 to 50 basis points by the end of the year, depending on the liquidity situation.



The seven-day reverse repurchase rate will be cut by 20 basis points, while the medium-term lending facility rate will be lowered by 30 basis points, Pan also highlighted.&nbsp;



While the loan prime rate cuts were expected, it does confirm that monetary stimulus is at least “occurring on a significant basis in China,” said Shane Oliver, head of investment strategy and chief economist at AMP. However, he noted that the cut alone is insufficient to lift the country’s economy, reiterating growing calls for more fiscal stimulus.



“The cost of money, the supply of money, is not the real issue in China. The real issue is a lack of demand, and that’s why I think fiscal stimulus is so important,” he added.



Despite recent cuts, the real interest rate in China is still “too high,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. “I expect more rate cuts next year as the Fed rate declines.”



Last month, China’s central bank trimmed its reserve requirement ratio 50 basis points. The move came as the PBOC released a blitz of support measures aimed at shoring up the world’s second largest economy, which is facing a prolonged property crisis and weak consumer sentiment.



China surprised the markets by shaving its major short and long term lending rates in July.



Last week, China reported slightly better than expected third-quarter GDP growth of 4.6% year-on-year. Additional data released on Friday, including retail sales and industrial production for September, had also beat expectations, a hopeful sign for the country’s flagging economy.



—CNBC’s Evelyn Cheng contributed to this report.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P-820x461.jpeg" alt="" class="wp-image-543550" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">China has announced in the past week a series of measures aimed at boosting its economy ahead of a key Politburo meeting later this week focused on reviewing the first half performance of the world’s second-largest economy. Str | Afp | Getty Images</figcaption></figure>



China’s National Bureau of Statistics on Friday reported third-quarter GDP growth of 4.6% year on year, slightly exceeding the 4.5% expected by economists polled by Reuters.



That’s less than the second-quarter growth of 4.7% year on year. On a quarterly basis, the third quarter saw 0.9% expansion, compared to 0.7% in the second quarter.



“The national economy showed positive signs of growth in September,” Sheng Laiyun, the bureau’s deputy commissioner, said at the press conference, according to CNBC’s translation of the Chinese. “The confidence is building up to hit the full-year growth target of around 5%.”



Other data released on Friday, such as retail sales and industrial production, had also beat expectations, a hopeful sign for the world’s second largest economy.



Beijing has faced growing public scrutiny over its ability to meet its own annual growth target of “around 5%.”



“Since real GDP expanded by 4.8% in the first three quarters of the year, the full year GDP growth target of around 5%&nbsp;is now within reach with extra stimulus in&nbsp;Q4,” said Tianchen Xu, senior economist at The Economist Intelligence Unit.



“Despite the multitude of challenges, China’s economy is not incurable as some would suggest,” Xu added. “There’s reason to be more optimistic about growth in the coming years, given how the government is committed to shoring up the economy.”



After the release of a slew of disappointing economic data, Chinese officials last month announced a slate of support measures to jumpstart its sluggish economy, including cutting the amount of cash the banks needs to have on hand by 50 basis points.



Authorities continued to dip feed more stimulus measures throughout this month amid low consumer sentiment and a flagging property sector. Over the weekend, China’s Minister of Finance Lan Fo’an told reporters that the central government has room to increase debt and the deficit, without giving any details on the size of the package.



Mainland China’s CSI 300 was trading up 0.7% and Hong Kong’s Hang Seng index was up 1.3% following Friday’s data release.



Bruce Pang, chief economist and head of research for Greater China at JLL, said that the performance of the economy “aligns with market expectations, given the weak domestic demand, a still struggling housing market, and slowing export growth.”

107275254-1690166741957-gettyimages-1171298060-AFP_1KN77P

China reports third-quarter GDP growth of 4.6%, slightly beating expectations

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-820x461.jpeg" alt="" class="wp-image-543281" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048848-1729142200339-gettyimages-2170767629-GERMANY_ECB.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Christine Lagarde, president of the European Central Bank (ECB), left, and Wolfgang Proissl, director of general communications at the European Central Bank (ECB), at a rates decision news conference in Frankfurt, Germany, on Thursday, Sept. 12, 2024.  Bloomberg | Bloomberg | Getty Images</figcaption></figure>



The European Central Bank is widely expected to announce its third interest rate cut of the year at its Thursday meeting, after policymakers flagged reduced inflation risks and a weakening growth outlook.



Headline price rises in the euro area eased to 1.8% in September, coming in below the central bank’s 2% target for the first time in three years.



A cut on Thursday would see the ECB reducing rates at consecutive meetings for the first time since December 2011.



Expectations for a faster pace of monetary easing have built since the ECB’s Sept. 12 meeting, when market pricing suggested just one more rate cut this year, rather than the two priced in as of Thursday morning.



Along with the latest inflation print on Oct. 1, that shift in sentiment has come amid dovish comments from various ECB members. ECB President Christine Lagarde also swayed markets, when she said the latest data readings “strengthen our confidence that inflation will return to target in a timely manner.”



Another key factor is the euro zone growth outlook. The ECB trimmed its euro zone growth forecast for 2024 last month on the back of weaker domestic demand, now projecting an 0.8% GDP rise, compared with 0.9% previously. Some of its biggest economies continue to face major challenges, including manufacturing weakness in Germany and a huge fiscal consolidation project looming in France; while sentiment indicators remain weak.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-820x461.jpeg" alt="" class="wp-image-543173" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108048818-1729133179349-gettyimages-2061912118-20090101240309-99-276079.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">09 March 2024, China, Peking: Ni Hong (r.), China’s Minister of Housing and Rural Development, speaks at a press conference.  Johannes Neudecker | Picture Alliance | Getty Images</figcaption></figure>



China will expand its “whitelist” of real estate projects and speed up bank lending for these unfinished developments to 4 trillion yuan ($561.8 billion) by the end of the year, the country’s housing ministry said Thursday.



Ni Hong, China’s minister of housing and urban-rural development, made the announcement at a press conference, alongside officials from the central bank, finance ministry and the National Financial Regulatory Administration.



A total of 2.23 trillion yuan had already been approved in loans to whitelisted developers. That figure will almost double to 4 trillion yuan by the end of 2024, according to a senior official from the financial regulatory administration.



Launched in January, China’s “whitelist” initiative allows city governments to recommend residential projects to banks for speedier lending. The intent was to ensure the completion of unfinished housing projects so they could finally be delivered to buyers.



All commercial housing projects are now eligible for the “whitelist” project, Xiao Yuanqi, vice minister of the administration said Thursday. The move is expected to broaden the list.



Xiao also stressed that banks should deploy funds “as soon as possible,” saying they could release the loans in full to developers rather than in tranches, according to CNBC’s translation of the Chinese.



The briefing was the latest in a series of high-level government policy announcements aimed at bolstering the economy.



In late September, Pan Gongsheng, the People Bank of China governor announced a 50 basis-point cut to the amount of cash banks need to have on hand, known as the reserve requirement ratio or RRR. He also lowered the minimum down payment for second-home loans nationwide from 25 percent to 15 percent.



Days later, officials in a top-level meeting, chaired by Chinese president Xi Jinping, pledged to “halt the real estate market decline and spur a stable recovery.”



<h3 class="wp-block-heading" id="h-disappointing-briefing">Disappointing briefing?</h3>



The officials on Thursday’s briefing appeared to be mostly “fine-tuning existing policies,” Bruce Pang, chief economist and head of research of Greater China at JLL, said. “It will take time for the improvement on sales volumes and prices to be translated into property investment and construction.”&nbsp;



Some investors saw the recent flurry of activity as a sign that Beijing was finally ready to take drastic measures to stimulate growth, and they had hoped for more stimulus measures from the briefing. As Xiao was speaking, Chinese CSI 300 real estate index dropped over 5%, in a sharp turnaround from gains of around 8.7% in the previous three trading sessions.



Volatility in the Chinese stock market is likely to continue as investors “lack conviction that the stimulus package and what’s been announced is going to turn around things,” said Chi Lo, senior economist at BNP Paribas Asset Management.



Over the weekend, officials from China’s Ministry of Finance announced that they would allow local governments to issue more special bonds for land purchases and allow affordable housing subsidies to be used for existing housing inventory, instead of only new construction.



Chinese property stocks soared on Monday off the news, with the Hang Seng Mainland Properties Index rising over 2%. Real estate was also the leading gainer in Mainland China’s CSI 300, advancing by nearly 5%.



From its peak in 2020, the HSMPI has lost more than 80%. In May, Ni told reporters at a press conference that developers “that must go bankrupt, should go bankrupt, or be restructured.”



<h3 class="wp-block-heading">Real estate slump</h3>



More than 50 cities across China have introduced policies to boost the real estate market, according to state media, citing the housing ministry.



Ahead of the Golden Week holiday, the city of Guangzhou announced it will remove all&nbsp;restrictions on home purchases. Meanwhile the governments of Beijing, Shanghai, Shenzhen moved to ease homebuying restrictions by non-local buyers and lowered the minimum down-payment ratios.



The slew of measures came after China’s previous measures had led to little meaningful rebounds. New home prices in August dropped at the fastest pace in more than nine years, according to the National Bureau of Statistics data.



The value of new homes sold fell by 23.6% for the year through August, slightly better than the 24.3% drop year-to-date as of July. Average home prices fell by 6.8% in August from the prior month on a seasonally adjusted basis, according to Goldman Sachs.



The real estate sector — once accounted for more than a quarter of China’s economy — had been in a painful downturn since 2021, when Beijing launched a crackdown on the sector’s high debt levels, sending a slew of developers to default on their debts and leave many housing projects unfinished. That had severely dampened homebuyers confidence in the market.



— CNBC’s Evelyn Cheng contributed to this story.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108046955-1728864181139-gettyimages-2177123447-2177123447-820x461.jpeg" alt="" class="wp-image-542016" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108046955-1728864181139-gettyimages-2177123447-2177123447-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108046955-1728864181139-gettyimages-2177123447-2177123447-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108046955-1728864181139-gettyimages-2177123447-2177123447-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108046955-1728864181139-gettyimages-2177123447-2177123447-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108046955-1728864181139-gettyimages-2177123447-2177123447-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/108046955-1728864181139-gettyimages-2177123447-2177123447.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A shipping container and gantry cranes at the Yangshan Deepwater Port in Shanghai, China, on Thursday, Oct. 10, 2024. Bloomberg | Bloomberg | Getty Images</figcaption></figure>



BEIJING — China’s exports grew by 2.4% in September from a year ago in U.S. dollar terms, while imports rose by 0.3%, customs data showed Monday.



Both figures were well below expectations. China’s exports were forecast to have risen by 6% year-on-year in September in U.S. dollar terms, according to a Reuters poll. That would be slower than the 8.7% increase in August.



Imports were expected to have climbed by 0.9% in September from a year ago, according to the Reuters poll. That would be slightly faster than the 0.5% increase in August.



Exports have been a bright spot in China’s economy, which has otherwise been weighed down by lackluster consumer spending and a real estate slump.



Inflation data out Sunday pointed to further weakness in domestic demand.



The core consumer price index, which strips out more volatile food and energy prices, rose by 0.1% in September from a year ago. That’s the slowest since February 2021, according to the Wind Information database. Tourism-related prices fell by 2.1% year-on-year, despite the Mid-Autumn Festival in September and Golden Week holiday that kicked off Oct. 1.



China’s National Bureau of Statistics is scheduled to release third-quarter GDP on Friday, along with retail sales, industrial production and fixed asset investment for September.



Chinese authorities have ramped up stimulus announcements since late last month, while so far falling short on the fiscal policy details many investors have hoped for. Stocks in China have swung wildly as beaten-down markets debate the ultimate impact of Beijing’s economic support.



This is a breaking news story. Please check back for updates.

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