Gough, N. (2014, November 21). In Change of Strategy, China Cuts Interest Rate. The
New York Times. Retrieved from http://www.nytimes.com/2014/11/22/business/china-
cuts-interest-rates.html
This article is talking about the change of Chinese strategy, which is cutting interest rate,
to face the country’s slowing growth. It is the first time in the last two years that Central Bank
of China decided to cut interest rate by using monetary policy. Central Bank of China cut its
benchmark one-year deposit rate by 0.25 percentage points, to 2.75 percent, and reduced the
one-year lending rate by 0.4 percentage points, to 5.6 percent. Firstly, the expansionary
monetary policy will help to relieve the country’s flagging market of large nation-owned
companies, because the large companies will find it more easily and cheaper to pay off the
loans. In addition, we are currently experiencing a global economic recession. Europe is now
facing a stagnation and inflation and trying to use quantitative easing policy to help the
economy. Also, Japanese currency is now facing depreciation and urgency actions have been
already taken. Thus, as a very important power in the global economy, Chinese expansionary
