HSBC Economist Jing Liu on China's LPR

The video discusses the People's Bank of China's (PBC) monetary policy, focusing on the unusual movement of the Loan Prime Rate (LPR) and Medium-term Lending Facility (MLF). It highlights PBC's structural tools to manage liquidity and the effectiveness of new initiatives like green relending. The video also clarifies recent rate cuts and examines the impact of the power crunch in Sichuan. Finally, it provides an economic outlook, noting infrastructure investment growth and a slowdown in export demand due to global normalization post-pandemic.

What is unusual about the recent movements of the one-year and five-year LPR?

• They moved in opposite directions.

• They both increased significantly.

• The one-year LPR moved while the five-year did not.

• Both remained unchanged.

What is the primary goal of the PBC's structural monetary policy instruments?

• To increase short-term interest rates.

• To inject liquidity into preferred sectors.

• To reduce the national debt.

• To stabilize the currency exchange rate.

What is a significant challenge faced by the PBC's new initiatives like green relending?

• Low take-up rate.

• Excessive government regulation.

• Lack of bank participation.

• High interest rates.

What is the main cause of the power crunch in Sichuan?

• A surge in population growth.

• Government-imposed power cuts.

• Reduced rainfall affecting hydropower.

• Increased industrial demand.

What is the expected trend for Chinese exports according to the video?

• An increase due to new trade agreements.

• A slowdown due to global economic normalization.

• Stability with no major changes.

• A significant increase due to global demand.