China's Cabinet hints at cutting the reserve ratio to aid economy

Sporadic restrictions to contain virus outbreaks continue to hamper sentiment.​

China made a surprise shift Wednesday by signaling the economy needs additional central bank support, a warning for the rest of the world about how circuitous the exit route from the Covid-19 pandemic is proving to be.

The State Council, China’s equivalent of a cabinet, hinted the People’s Bank of China could make more liquidity available to banks to boost lending. It’s a move that puts the PBoC at odds with the US Federal Reserve’s discussions around tapering its bond-buying program, suggesting that monetary policy in the world’s two biggest economies could be headed in opposite directions again.

Economists pinned China’s pivot