China's central bank, the People's Bank of China, cut its required reserve ratio by 25bp to 10.75%. This releases yuan liquidity of 500 billion. The economic data is not as good as expected. Retail sales grew 3.5% year-on-year, year-to-date, which was slower than market expectations. But this was mainly driven by the discontinued subsidies for electric cars. We believe that the RRR cut will hardly help to boost EV sales. However, the cut could help to lower market interest rates, which could help to lower bond issuance interest costs. This may benefit real estate property developers and local government financial ... (full story)