China's Economic Stimulus: Interest Rate Cuts and Fiscal Boosts

China's central bank has lowered interest rates and injected liquidity to reverse economic slowdowns. The government plans to issue special sovereign bonds worth 2 trillion yuan. Despite strong deflationary pressures and property market downturn, these measures aim to achieve the annual 5% growth target.

China's central bank acted to lower interest rates and inject liquidity into the banking system on Friday, signaling an urgent push to revive economic growth towards its 5% target for the year. Beijing's moves precede expected fiscal measures before China's week-long holiday starting October 1st.

As part of the fresh fiscal stimulus, China plans to issue special sovereign bonds worth around 2 trillion yuan ($284.43 billion) this year, according to sources. Mark Williams, Capital Economics chief Asia Economist, estimates this could boost annual output by 0.4%.

Facing deflationary pressures and a sharp property market downturn, China's economic data has frequently missed forecasts, casting doubts on meeting the growth target. Goldman Sachs analysts believe persistent growth weakness has prompted this policy shift.

(With inputs from agencies.)