China's Financial Market Shaken by Dual Policy Shocks: Rate Cuts and Anti-Competitive Measures

Published: May 21, 2025 09:29

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On May 20, 2025, China's financial market was hit by two major policy shocks: On the one hand, six major state-owned banks simultaneously lowered their RMB deposit interest rates, with the demand deposit rate falling to 0.05%, the one-year fixed deposit rate dropping below 1% to 0.95%, and the long-term deposit rate declining by 25 basis points. On the other hand, the National Development and Reform Commission (NDRC) explicitly stated at a press conference its intention to "rectify cut-throat competition," proposing four major measures, including eliminating outdated capacity, strictly controlling new coal chemical and alumina projects, and strengthening market supervision. These two policies, targeting the monetary and industrial sectors respectively, have formed a complex game between short-term and long-term economic pressures and development momentum, intensifying the impact on major asset classes and the divergence in expectations!

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