China’s central bank announced a 25 basis point cut to rates on its structural policy tools, effective January 19. People’s Bank of China Deputy Governor Zou Lan detailed the move designed to target specific industries. The re-lending program for tech innovation will expand by 400 billion yuan to 1.2 trillion yuan, while quotas for agricultural and small businesses increase by 500 billion yuan.

These measures arrive as Beijing fights tepid consumer spending and a prolonged housing crisis. Officials also lowered the minimum down-payment ratio for commercial properties to 30% to reduce market inventory. The PBOC aims to support 'major strategic areas,' providing a targeted lift where the private sector remains hesitant to invest.

Growth in the world’s largest economy is expected to decelerate this year versus 2025. Markets reacted immediately, with the yuan slipping before recovering some losses. Investors are watching for further stimulus, as the government balances monetary easing with structural reforms to stabilize the slowing economy.