China bids to kickstart struggling economy as it unleashes biggest round of stimulus since Covid

China’s central bank has unleashed its biggest round of stimulus since Covid in a bid to revive the ailing fortunes of the world’s second-biggest economy.

The People’s Bank of China (PBOC) cut its main interest rate from 1.7 per cent to 1.5 per cent, eased mortgage rules and loosened bank reserve requirements to free up more cash for new lending.

It also introduced initiatives worth more than £80billion to boost the stock market by providing funds to financial institutions to buy shares and pay for buy-backs.

Beijing is battling a sharp economic slowdown amid a severe downturn in its property market.

That has left a string of developers defaulting on their debts and a swathe of unwanted apartments, in a crisis that has weighed heavily on consumers – who have 70 per cent of savings parked in real estate.

Yesterday’s stimulus sent China’s CSI 300 Index surging 4.3 per cent higher, its best day since July 2020 and also boosted global shares.

London’s FTSE 100 ended 0.3 per cent higher, led by its global mining stocks whose fortunes are closely linked to Beijing’s voracious appetite for copper and other metals.

Anglo American and Antofagasta rose by more than 6 per cent and Rio Tinto gained more than 4 per cent. But experts said more help may be needed to restore China’s fortunes.

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