Last week’s “third plenum” of China’s Communist Party may have disappointed with its lack of any plans for large-scale stimulus, but its central bank has done its little bit to support a sluggish economy with an unexpected interest rate cut.

On Monday, the People’s Bank of China cut two key policy rates by 10 basis points, its first rate reduction in nearly six months, lowering the cost of mortgages and other borrowing.

Xi Jinping is doubling down on his economic strategies first articulated at the third plenum in 2015.Credit: AP

While it’s a small move and one constrained by the bank’s concern about yuan weakness, it’s a sign that the government is worried about the dwindling momentum in the economy, which posted below-target growth of 4.7 per cent in the second quarter. The official target for GDP growth this year is 5 per cent.

In the lengthy statement, or “resolution”, issued at the weekend detailing the plans the party has mapped out for the next five years at its twice-a-decade third plenum, it was notable that the Xi Jinping-dominated leadership has no plans to implement the large-scale stimulus that most external analysts believe is needed to both boost growth and change its composition.

While there was a passing mention of the need to “refine long-term mechanisms for expanding consumption” and another to “actively expand domestic demand”, the resolution didn’t detail those mechanisms, let alone announce any near-term measures for boosting consumption.

Indeed, it is clear from the statement that Xi is doubling down on the strategies first articulated at the third plenum in 2015, when the “Made in China 2025” strategy was unveiled, with its focus on advanced manufacturing and dominance of high-tech sectors such as artificial intelligence, aviation, aerospace, green energy,........

© Brisbane Times