China launches broad financial package to stabilize market, shore up economic momentum

China on Wednesday announced a broad set of monetary, regulatory, and market-oriented policies aimed at stabilizing the market, boosting expectations, and shoring up economic momentum.

The package—introduced at a press conference by top officials from the People's Bank of China (PBOC), the National Financial Regulatory Administration (NFRA), and the China Securities Regulatory Commission (CSRC)—includes interest rate cuts, liquidity injections, expanded refinancing tools, and targeted support for key sectors such as technology, real estate, and small businesses.

PBOC governor Pan Gongsheng said the central bank will cut the reserve requirement ratio (RRR) for financial institutions by 0.5 percentage points starting May 15, expecting to provide about 1 trillion yuan ($138.9 billion) in long-term liquidity.

Key policy rates will also be reduced, including a 10-basis-point cut in the 7-day reverse repo rate from 1.5 percent to 1.4 percent, and a 25-basis-point cut in interest rates for structural monetary policy tools.

Interest rates for individual housing provident fund loans will also be lowered by 25 basis points, and structural tools will be scaled up as well, with expanded refinancing facility to support technological innovation, consumer services, and rural development, Pan said.

Responding to the package announcement, Bruce Pang, distinguished senior research fellow at the National Institution for Finance and Development, said the reductions in the policy rate and RRR definitely provide crucial support to China's economy.

"As policymakers navigate economic uncertainties, continued easing is likely to remain a central theme in the financial landscape," he added.

Li Yunze, head of the National Financial Regulatory Administration, announced that the NFRA would accelerate the introduction of a series of financing mechanisms that align with the new model of real estate development to help consolidate the stability of the real estate market.

He also pledged to expand the scope of long-term insurance fund investment, aiming to inject more incremental capital into the market. In addition, a policy package will be rolled out to strengthen financing support for small and private enterprises.

CSRC Chairman Wu Qing said the commission will deepen cross-border regulatory cooperation to foster a stable, transparent, and predictable environment for Chinese companies operating overseas.

For listed companies significantly affected by the US' unilateral tariffs, Wu said the CSRC will adopt a more flexible regulatory approach in areas such as equity pledges, refinancing, and the use of raised funds, helping them navigate operational challenges.