The PBOC's lower rates on new loans to business kicks in today … but …
A weekend announcement from the People's Bank of China on a lower reference rate for loans to SMEs (in a nutshell, more at these links)
- we have had endless "reforms" in recent years that are nothing more than a veneer: this looks an easily-gameable version of the same.
- Does anyone believe Chinese banks are not already lending at incredibly-favourable rates to key SOEs? Does anyone believe banks are going to lend to SMEs on more generous terms on a purely market/risk basis? That doesn't even happen in the West, so why should it in China?
- Most importantly, if there is any real signal from this move it is that for new loans at least, monetary policy is being eased, meaning further gradual stimulus. That's not really a surprise
Bolding mine. It seems in conflict with the above two points but nevertheless is the signal, yes.