Slowing economy gets a lift: rates cut for seventh time in three years

Article Abstract:

China's central bank has reduced interest rates for the seventh time since 1996 in an effort to boost the economy and further bolster its thriving stock market. It has slashed the benchmark one-year deposit rate from 3.78% to 2.25% and the one-year loan rate from 6.39% to 5.85%, effective Jun 10, 1999. However, analysts believe that the rate cuts will not spur consumption because of prohibitive real interest rates that prompt consumers to keep their money in the bank instead of spending or investing elsewhere. Its goal to boost the stock market is seen as more viable, with its stock markets posting sharp gains in recent weeks as rumors of the rate cuts came out.

Financial management, Interest Rates, Economic aspects, Central banks, Central Bank of China

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Government to unveil plan for tackling bad bank loans

Article Abstract:

China will soon launch an aggressive scheme to handle bad loans at its biggest banks. The plan involves the establishment of a Resolution Trust Corp-style company, to be called Xinda Asset Management Co, that will buy up to $36 billion in bad loans held by China Construction Bank and will try to collect these loans. Loans that cannot be collected will be paid off by the government. If the asset management company's efforts prove successful, similar initiatives would be launched at the country's other major state-owned banks, including Bank of China, Industrial and Commercial Bank of China and Agricultural Bank of China.

Government domestic functions, DEPOSITORY INSTITUTIONS, Banking industry, Management, Bad debts, Bank loans

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Justice minister is suddenly detained

Article Abstract:

Chinese justice minister Gao Changli has been detained due to his conduct. The ministry, which is important to political and economic reforms, has been placed in turmoil as a result of the detention.

Executive changes & profiles, Politics NEC, Political activity, Political aspects, Politics, Public officers, Government officials, Gao Changli

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