The People's Bank of China on June 7 lowered banks' one-year lending rate by a quarter percentage point to 6.31 percent and one-year deposit rate by the same margin to 3.25 percent — the first full-scale monetary easing by China since a similar move in December 2008 in the wake of the Lehman Brothers shock.
Clearly Beijing feels a sense of crisis about China's economic slowdown in the midst of the Greek and Spanish sovereign debt crises. Given China's critical role as an engine of world economic growth, it is hoped that Beijing will take necessary measures to stabilize its economy.
The crisis in Europe — China's most important market — is taking a toll on the Chinese economy. Growth of China's gross domestic product has slowed for five consecutive quarters. The January-March period of 2012 saw the annual rate of GDP growth fall to 8.1 percent from 8.9 percent in the previous quarter.