The People’s Bank of China (PBOC) kept China’s key interest rates unchanged on Wednesday, despite analyst expectations for a rate cut and wants the central bank to take a much worse position in the hope of further easing monetary policy.
The central bank has also decided to keep the core interest rate for early one-year loans at 3.7 per cent and for five-year early loans at 4.6 per cent. Although the central bank last week kept the medium-term lending mechanism unchanged for a year, analysts expected the bank to announce an interest rate cut yesterday.
The interest rate on primary loans for the last one year was cut by 5 basis points last January, the second in a row.
Although the central bank has the power to set interest rates, interest rates on initial loans are reportedly determined on a monthly basis based on requests submitted by 18 banks to the Central Bank of China. In August 2019 this method was used to set interest rates in China as an alternative to the traditional mechanism.
In a separate context, the Chinese parliament on Wednesday ratified international agreements banning forced labor, at a time when it has been accused of seeking forced labor in the Muslim-majority northwestern province of Xinjiang.
One of the conditions imposed by the European Union to ratify the Bilateral Agreement on Investment, signed in late 2020, is the ratification of these agreements by the International Labor Organization.
The Standing Committee of the National People’s Assembly (acting as parliament in China) approved the 1930 Compulsory Labor and 1957 Abolition of Compulsory Labor Agreements, which Parliament announced at the end of a three-day meeting.
The move comes at a time when the International Labor Organization (ILO)’s panel of experts expressed “grave concern” over the treatment of ethnic and religious minorities in China, especially in the Xinjiang region.
According to human rights organizations, at least one million people from Uyghur and other Muslim minorities are being held in camps in the region in northwest China. Beijing, for its part, claims that vocational training centers are aimed at keeping them away from terrorism and extremism.
The issue has alarmed the international community. In December 2021, the United States, accusing China of genocide against Uyghurs, enacted legislation banning the purchase of forced labor by these minorities. Beijing vehemently denies these allegations.