China's Ambitious Fiscal Stimulus to Revive Economic Growth

China's central bank cut interest rates and injected liquidity into the banking system to push economic growth towards its 5% target. Additional fiscal measures are anticipated before China's week-long holidays, with megacities like Shanghai and Shenzhen planning to lift home purchase restrictions. The new measures are aimed at stimulating consumption and alleviating the property crisis.

China's central bank has lowered interest rates and injected liquidity into the banking system as a last-ditch effort to restore economic growth to this year's 5% target. Fiscal measures are expected before the upcoming holidays, reflecting the government's increased urgency in addressing economic challenges.

Sources told Reuters that megacities Shanghai and Shenzhen plan to lift home purchase restrictions soon, joining other cities in easing the property crisis. Following a Politburo meeting, China will issue special sovereign bonds worth about 2 trillion yuan ($284.43 billion) as part of the new fiscal stimulus.

As economists express cautious optimism, Goldman Sachs analysts note that growth weakness has reached a tipping point for policymakers. Key economic data reveals ongoing challenges, including a sharp contraction in industrial profits. The country's latest policies aim to stimulate household spending, address local government debt, and stabilize the real estate market.

(With inputs from agencies.)