“We expect at least four more reserve ratio cuts in 2015, in view of the prospect for further deceleration in economic fundamentals,” Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd., said in a Bloomberg article, arguing that the rising risk of deflation, weak factory and services readings, and an effective clampdown on stock-market speculation had helped trigger the cut.
Growth slowed to 7.4% in 2014, the lowest level in a quarter century. Economists are slightly pessimistic and widely expect China to lower their annual growth target to 7% this year from 7.5% last year.
The economy has been slowing due to a number of factors, including a slowing property market and greater scrutiny over corruption, which has caused many large companies to delay projects.
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Max Chen contributed to this article.