China cuts rates, gives lenders more freedom

China’s central bank cut interest rates by a quarter of a percentage point last night to stoke the weakening economy.

The move, seen by economists as China’s strongest measure yet to steer the economy away from a hard landing, sends two important messages. First, as much as Beijing wants to have a healthier and more balanced economy, fast growth remains a priority. Second, policymakers have become confident of liberalising the nation’s tightly controlled interest rate regime.

The cut came less than 48 hours ahead of China’s May macroeconomic data releases this Saturday, suggesting China’s economic thermometers, including fixed asset investment and industrial production, might have deteriorated further...