China’s economic malaise has pushed policymakers and state-owned banks to attempt an escalating series of remedies. Their latest attempt: A surprisingly aggressive cut to a key lending rate, the Wall Street Journal reported. The People’s Bank of China said Tuesday that China’s major banks reduced the five-year loan prime rate, a benchmark for home loans, to a new low of 3.95%, from 4.2% previously. It was the largest cut since the rate was introduced five years ago, and a much bigger reduction than economists had expected.

China cut the benchmark reference rate for mortgages at a monthly fixing on Tuesday by more than expected, as authorities ramped up efforts to stimulate credit demand and revive the property market, Reuters reported. Commercial banks' improving net interest margins following recent deposit rate cuts and the reduction to bank reserves earlier this month has paved the way for lenders to reduce borrowing costs to support the economy. The five-year loan prime rate (LPR) was lowered by 25 basis points to 3.90% from 4.20% previously, while the one-year LPR was left unchanged at 3.45%.

China’s massive property market is crumbling. Xi Jinping wants to revive socialist ideas about housing and put the state back in charge, the Wall Street Journal reported. Home prices across China are falling, developers have gone bust and people are doubting whether real estate will ever be a viable investment again. The meltdown is dragging down growth and spooking investors worldwide. Under the new strategy, the Communist Party would take over a larger share of the market, which for years has been dominated by the private sector.

New bank loans in China jumped by more than expected to an all-time high in January, as the central bank moved to shore up the sputtering economy, reinforcing expectations for more stimulus in the coming months, Reuters reported. Policymakers have pledged to roll out further measures to support the weaker-than-expected post-COVID recovery in the world's second-largest economy, amid a deep property crisis and prolonged stock market rout.

China's central bank on Thursday said it would keep policy flexible and precise to boost domestic demand, while maintaining price stability, amid signs of a patchy economic recovery and rising deflationary risks, Reuters reported. In its quarterly policy implementation report, the People's Bank of China said the authorities face some difficulties and challenges in promoting an economic recovery amid global uncertainties. "Prudent monetary policy should be flexible, moderate, precise and effective...

Deflation is becoming more entrenched in China, with consumer prices falling in January at their steepest pace in more than 14 years—a stark symptom of deepening economic malaise that spells trouble for the global economy, the Wall Street Journal reported. The latest data suggest China faces a growing risk of slipping into a longer-term spell of falling prices that becomes harder to reverse the longer it lasts. That presents a special challenge for the rest of the world.

China has ousted the head of its securities watchdog, the official Xinhua news agency said, replacing him with a veteran regulator with a reputation for tough action as policymakers struggle to stabilise the country's stock markets, Reuters reported. The cabinet has replaced Yi Huiman as chairman of the China Securities Regulatory Commission (CSRC) with Wu Qing, who has led the Shanghai Stock Exchange and served as a key deputy in Shanghai's municipal government, Xinhua said on Wednesday.

Distressed Chinese developer Guangzhou R&F Properties plans to sell a property project in London by asking to receive some of its dollar bonds and just HK$1 (S$0.17) of cash, the Business Times reported. The defaulted builder signed a letter of intent to sell the holding company of Market Towers at 1 Nine Elms Lane, according to a filing late Tuesday (Feb 6) in Hong Kong. The mixed-used development is valued at £1.34 billion (S$2.27 billion) and includes 437 residential units and a hotel, it said.

China's securities regulator said on Tuesday it would suspend brokerages from borrowing shares for lending and cap the size of the so-called securities re-lending business, as part of further efforts to curb short-selling, Reuters reported. The watchdog will also ban securities lending to investors who sell stocks on the same day of purchase, and vowed to crack down on illegal arbitrage using short-selling.

Europe's green energy transition is stuck between a rock and a hard place. A flood of cheap Chinese solar panel imports is driving record solar energy installations. But those same imports are crushing Europe's few local solar manufacturers, Reuters reported. Governments and industry are split over how to respond. Europe just had a bumper year for green energy. European Union countries installed record levels of solar capacity, 40% more than in 2022. The vast majority of those panels and parts came from China – in some cases, 95%, International Energy Agency data show.