China’s economy is making a strong push for a Return of the Dragon-style comeback. Beijing has rolled out major stimulus measures in its boldest move since the pandemic, slashing bank reserve requirements and interest rates. This financial lifeline aims to revive the world’s second-largest economy, which is facing a property crisis and a looming deflationary spiral.

• China’s central bank lowered its policy rate by 0.2%, bringing it down to 1.5%, and reduced average mortgage rates by 0.5%. These cuts are designed to ease household debt and boost consumer spending.
• The reserve requirement ratio was also cut by 0.5%, injecting an estimated 1T yuan ($137B) into the economy — encouraging banks to lend more by allowing them to hold fewer reserves.

Crouching tiger, hidden stimulus: Dubbed “the most significant … stimulus package since the early days of the pandemic,” the move pushed China’s SSE Composite Index up by over 4% on Tuesday and strengthened the onshore Yuan to its highest level since May 2023. However, Capital Economics’ head of China economics warns the stimulus “may not be enough,” while another expert suggests it “probably comes a bit too late.” With more easing expected this year, the question remains: Will Beijing revive the sleeping dragon, or will the stimulus efforts flicker into the dark?