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Today, the People’s Bank of China cut its key interest rate for the first time in almost two years to help support China’s economy. The People’s Bank of China lowered the rate at which it provides one-year loans to banks by 10 basis points.

Not a huge move–100 basis points equals one percentage point–but earlier than many economists–and I–had anticipated.

The problem the central bank is trying to address is consumption growth that is running lower than expect due to the government’s tight “zero Covid” restrictions that have locked down major Chinese cities over the last month.

For the full year, new data show, the economy grew at an 8.1% rate, well above the government’s target of “over 6%.”

But recent numbers for the last quarter and for December show a big slowdown in growth. Retail sales, for example, grew by just 1.7% year over year in December from a 3.9% year over year growth rate in November and projections by economists for a 3.7% year over year growth rate for the month.

In the final three months of the year, the economy grew by a 1.6% quarter to quarter rate.

Along with the rate cut on bank loans, the People’s Bank upped its offer of one-year loans to 700 billion yuan ($110). That’s above the 500 billion in yuan in maturing loans to banks.

Back on January 3 I added Tencent Holdings to my Volatility (on my subscription and sites) and long-term 50 Stock Portfolios. That position is up 4.07% as of the close on January 14.

I also added the iShares China Large Cap ETF to my Perfect 5 ETF Portfolio (on my subscription sites.) That position is up 4.2% as of the close on January 14.