China Tries to Rescue the Economy, Depositors May Say "No"
On Thursday, the People’s Bank of China dropped the benchmark one-year lending rate by 25 basis points, the first cut in interest rates since 2008. Analysts guessed that the central bank’s move signaled that the economy in May took a turn for the worse from April, when growth may actually have been negative.
The initial May numbers, released yesterday by the National Bureau of Statistics, painted a picture of a slumping economy. Electricity production, the most reliable indicator of Chinese economic activity, was up only 2.7% over the same month last year. Because the growth of electricity historically outpaces the