This report does not constitute a rating action. China's stimulus measures announced May 7 picked up where they left off last September. S&P Global Ratings expects further monetary easing over the next two years to offset the shock of higher tariffs. This will pinch bank margins and returns. Our economists forecast 50 basis points (bps) of cuts in policy rates this year and a further 30 bps in 2026 (see " Global Macro Update: Seismic Shift In U.S. Trade Policy Will Slow World Growth ," published on RatingsDirect on May 1, 2025). Yesterday's 10 bps cut was therefore not a surprise. Regulators yesterday also slashed banks' reserve requirement ratio by 50 bps, boosting system liquidity by some Chinese renminbi 1
