More Bank Rate Cuts: Is China Worse Off Than Imagined?

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It is not a good sign when a company cuts interest rates five times in three months. The government may be sensing more trouble in China than it is letting on.

According to Bloomberg, "The one-year lending rate will drop by 0.27 percentage point to 5.31 percent and the deposit rate by the same amount to 2.25 percent from tomorrow, the People’s Bank of China said."

The central government may have seen the 27% drop in Japanese exports last month and worry it is next. Or, officials may know more than the are letting on and China is moving downhill more quickly than outsiders expect.

Douglas A. McIntyre