China unveils rate cut, mortgage subsidies to spur growth

Beijing, China unveiled measures on September 29 to stimulate credit into key sectors like infrastructure, technology, and support homebuyers, as the economy grapples with slowing growth. The cabinet pledged to enhance counter-cyclical policy support to tackle rising economic strains, signaling urgency to meet growth targets. China aims for growth between 4.5-5% this year, but indicators like industrial output, retail sales, and investment have weakened since the second quarter's 4.3% growth.

The People's Bank of China (PBOC) announced a 25 basis point cut on supplementary lending rates and reduced the one-year PSL rate to 1.5% from 1.75%. The PBOC also expanded the PSL facility to support investments in water, power-grid, computing, communications, urban pipeline, and logistics networks. Additional policy measures include raising the quota for its sci-tech innovation relending facility by 200 billion yuan and increasing it for farm and small businesses by 500 billion yuan.

The central bank also introduced a nationwide interest subsidy for commercial mortgages for eligible first-time homebuyers, with an annual subsidy of 1 percentage point for up to five years.