The People’s Bank of China and other authorities in China announced multiple stimulus measures on Tuesday, including:

• People’s Bank of China to cut its benchmark interest rate
• PBOC to lower the amount of cash that banks need to hold in reserve (this would free up more yuan for lending)
• will cut the interest rate payable on existing mortgages
• will lower down payments for second homes
• said further easing is in the pipeline
• PBOC to offer 500 billion yuan in loans to funds, brokers and insurers to buy Chinese stocks
• PBOC to stump up another 300 billion yuan to finance share buybacks by listed companies

The Wall Street Journal (gated, but here is the link if you can access it) rounds up many economists and analysts who are underwhelmed, reasoning:

• borrowing costs are already low, yet credit data suggests households and businesses aren’t that interested in borrowing
• consumer confidence is near record low levels, reflecting anxiety over jobs in a weak economy
• the meltdown in property continues

For example, the Journal cite Capital Economics, who acknowledge the moves are heading the right way:

• “but are not really enough to drive a turnaround in the economy.”
• need more aggressive fiscal support
• weakening activity is hitting tax revenue and local governments are struggling to spend their borrowing quota on viable infrastructure projects
• central government needs to borrow and spend more to drive up growth and inflation
• local government needs more freedom to use their borrowing quotas to support consumption