China's central bank launches 10-point plan to stabilize markets

China’s financial authorities, led by the People’s Bank of China, unveiled a comprehensive 10-point monetary policy package aimed at enhancing market confidence, boosting long-term liquidity, and supporting innovation-driven growth. The measures—ranging from reserve requirement and interest rate cuts to new tools for tech financing—underscore China’s efforts to stabilize economic expectations amid global uncertainty and domestic restructuring

On May 7, 2025, China’s State Council held a press conference where key financial regulators—including the People’s Bank of China (PBOC), the National Financial Regulatory Administration (NFRA), and the China Securities Regulatory Commission (CSRC)—outlined a sweeping set of policies aimed at stabilizing financial markets and economic expectations.

PBOC Governor Pan Gongsheng announced that the central bank will intensify macroeconomic regulation with 10 coordinated monetary policy tools designed to inject liquidity, guide market rates downward, and support high-quality development.

PBOC’s 10-point policy includes:

1. RRR cut of 0.5 percentage points: Estimated to release RMB 1 trillion (US$138 billion) in long-term liquidity.

2. Targeted RRR exemption: Temporary reduction of the reserve requirement ratio from 5 percent to 0 percent for auto finance and financial leasing firms.

3. Policy interest rate cut: A 0.1 percentage point reduction in the 7-day reverse repo rate from 1.5 percent to 1.4 percent, expected to drive down the loan prime rate (LPR).

4. Structural rate cuts: A 0.25 percentage point reduction in interest rates for structural tools, including agriculture and small and micro enterprises (SMEs) refinancing and pledged supplementary lending (PSL), to lower borrowing costs.

5. Housing fund loan rate reduction: A 0.25 percentage point cut in five-year personal housing provident fund loan rates, reducing first-home rates from 2.85 percent to 2.6 percent.

6. Tech refinancing expansion: Increase of RMB 300 billion (US$41.4 billion) in refinancing quotas for technology innovation and industrial upgrades, now totaling RMB 800 billion (US$110.4 billion).

7. Service consumption and elderly care support: Establishment of a new RMB 500 billion (US$69.0 billion) refinancing tool to promote loans in consumer services and elderly care.

8. Rural and SME lending expansion: An additional RMB 300 billion (US$41.4 billion) to support rural development, micro-enterprises, and private firms, aligned with structural rate cuts.

9. Capital market liquidity tools optimization: Merging RMB 500 billion (US$69.0 billion) in swap facilities for securities, funds, and insurers with RMB 300 billion (US$41.4 billion) in stock repurchase refinancing into a unified RMB 800 billion (US$110.4 billion) tool.

10. Tech innovation bond risk-sharing tool: Introduction of a central bank-backed low-cost refinancing mechanism to purchase tech bonds with shared-risk guarantees from local governments and market players.

    
    

These policies are aimed at strengthening credit flow to key sectors, lowering financing costs, and guiding financial institutions to support real economic needs, especially in emerging industries and innovation-driven enterprises.