China has cut benchmark lending rates for the first time since October, while major state banks lowered deposit rates as authorities work to ease monetary policy to help buffer the economy from the global tariff wars.

The rate cuts are aimed at stimulating consumption and loan growth while still protecting commercial lenders’ shrinking profit margins, the government said.

The country’s central bank, the People’s Bank of China (PBOC), said the one-year loan prime rate (LPR), a benchmark determined by banks, had been lowered by 10 basis points to 3.0%, while the five-year LPR was reduced by the same margin to 3.5%.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

The lending rate cut was announced just after five of China’s biggest state-owned banks said they have trimmed their deposit interest rates.

Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of China reduced deposit rates by 5-25 basis points (bps), according to rates shown on the banks’ mobile apps.

The deposit rate reductions should guide smaller lenders in making similar cuts.

Marco Sun, chief financial market analyst at MUFG Bank (China), said the dual rate cuts were aimed at boosting credit lending and stimulating consumption. “The central bank is likely to switch to a wait-and-see approach in coming months unless external geopolitical risks deteriorate enough to extinguish hopes that the economy can stabilise,” Sun said.

The rate cuts are part of a package of measures announced by PBOC Governor Pan Gongsheng and other financial regulators before talks between China and the United States in Geneva in early May that led to a de-escalation in their trade war.

Global investment banks are raising their forecasts for China’s economic growth this year, after Beijing and Washington agreed to a 90-day pause on tariffs, despite uncertainty around China–U.S. trade negotiations.

“We still believe it will be quite challenging for Beijing to achieve its ‘around 5%’ growth target unless it rolls out a sizable stimulus package,” Ting Lu, chief China economist at Nomura, commented. “Considering the respite on the trade war, Beijing might be under less pressure to introduce the necessary stimulus and reforms.”

China welcoming more foreign companies

China has rolled out a set of measures to help foreign trade companies expand into the domestic market of 1.4 billion potential consumers to hedge against uncertainties of foreign business.

For China’s exporters, switching to sell in the domestic market comes along with challenges, including adapting to different standard and price systems and domestic consumer preferences.

The Ministry of Commerce, together with local governments and multiple enterprises, said it has been taking intensive actions to help foreign trade firms alleviate operational pressures and to help smooth the transition.

“The Ministry of Commerce will focus on helping 10 major provinces in foreign trade and consumption, and carry out a series of special matchmaking activities around key industries,” said Sheng Qiuping, vice-minister of commerce.

The activities have been launched in provinces such as Jiangsu, Hainan, Hubei, Hunan and Shandong. The events have mainly focused on helping industries with foreign trade advantages like light industry, household appliance, furniture and home furnishings, and food, according to the commerce ministry.

“As the world’s second-largest consumption market, China has the largest middle-income group in the world, with stable growth in investment and consumption and enormous potential,” said Xu Man, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

Multiple domestic online and offline retailers such as JD, Alibaba’s online trading platform 1688, as well as Yonghui Superstores, said they would like to provide more domestic sales channels for foreign trade firms facing export obstacles.

For example, 1688 said for foreign trade companies with inventory backlogs the platform will provide sales assistance services and reduce commissions.

Dubai is to allow individuals and businesses to use cryptocurrency to pay for government services.

Dubai Finance (DOF) has signed a Memorandum of Understanding (MoU) with Crypto.com, a global cryptocurrency trading platform, to enable the payment of government services fees using cryptocurrencies.

It marks a significant step in advancing digital finance on a global scale in the UAE.

The agreement was signed at the recent Dubai FinTech Summit. The DOF said that the partnership “supports the implementation of the Dubai Cashless Strategy by enabling secure and efficient financial transactions through cryptocurrencies”, adding that the move also “paves the way for Dubai’s transition to a fully digital, cashless society by empowering the Government of Dubai to introduce a new digital payment channel across its official platforms”.

Abdulla Mohammed Al Basti, Secretary-General of the Executive Council of Dubai, said that adopting secure cryptocurrency solutions within the Government of Dubai’s payment system reflects a proactive approach to anticipating future needs and responding to global economic and financial developments.

Al Basti said: “Dubai continues to advance through co-ordinated efforts across government entities and key sectors to meet and exceed the expectations of individuals, businesses, and the wider community.

“As a global leader in digital transformation, the emirate is further strengthening its position by deploying the latest secure financial technology solutions that support its cashless strategy, streamline government transactions, and foster innovation in financial services.

“I extend my sincere appreciation to the Department of Finance for enabling new global partnerships that support the objectives of the Dubai Economic Agenda D33 and reinforce Dubai’s status as a global hub for innovation.”

Abdulrahman Saleh Al Saleh, Director-General of DOF, said: “We take great pride in Dubai Finance’s key role in driving the Dubai Cashless Strategy and shaping a distinctive digital financial future.

“We remain committed to collaborating with our partners across government entities and leading financial service providers to advance the digital payment ecosystem and develop innovative solutions that support the rapidly evolving digital economy.”

Eric Anziani, President of Crypto.com, said: “The Government of Dubai has been a true global visionary with its plans for a cashless society. We are proud to be selected to support Dubai’s Department of Finance as part of this initiative, which will see Crypto.com enable the delivery of the first comprehensive and holistic Government-wide implementation of payment digitisation.

“We are excited to bring our capabilities and innovative thinking to catalyse this progress and we recognise the exceptional vision of Dubai’s leadership in shaping the future of economic growth with ambitious programmes such as these.”

Amna Mohammed Lootah, Director of Digital Payment Systems Regulation, said: “The Dubai Cashless Strategy aims to strengthen the emirate’s position among the world’s leading digital cities, with a goal of conducting more than 90% of financial transactions across both the public and private sectors through cashless methods by 2026.

“The signing of this agreement with a globally renowned cryptocurrency platform marks a ground-breaking initiative, enabling government service users to pay all government fees through digital currencies – an unprecedented step in the global financial landscape.

“We are confident that this milestone will significantly accelerate the advancement of the Dubai Cashless Strategy.”

The Dubai Cashless Strategy is expected to drive economic growth by adding at least AED8bn ($2.2bn) annually to the economy, fuelled by the development of a wide range of innovative financial technology services and the accelerated expansion of Dubai’s fintech sector.

Once the necessary technical arrangements for the agreement’s activation are finalised, individuals and businesses customers of government entities will be able to pay service fees seamlessly through Crypto.com’s digital wallets.

The platform will securely convert these payments into Emirati dirhams and transfer them to Dubai Finance accounts, ensuring a streamlined, secure and innovative payment framework.

China’s focus on developing the digital economy and bolstering the application of artificial intelligence will drive industrial transformation and inject fresh impetus into the country’s tech development, according to officials, experts and business leaders.

Liu Liehong, head of the National Data Administration (NDA), said the country’s digital economy has gained strong momentum, with the added value of the core digital industries accounting for about 10% of GDP.

During Liu’s presentation at a forum of the 8th Digital China Summit in Fuzhou, capital of Fujian province, he said significant progress has been made in fields such as AI, integrated circuits, industrial software and basic software.

The number of China’s ‘lighthouse factories’, which represent the highest level of intelligent manufacturing, represents more than 40% of the global total, demonstrating the deep integration of data elements with digital technologies, especially AI, he noted.

Liu said the administration will enhance the core competitiveness of the digital economy, develop new quality productive forces in accordance with local conditions, support technological innovations and industrial applications of AI, and nurture new enterprises working in the digital economy.

More efforts will be made to promote the in-depth integration of the real economy and the digital economy, while strengthening international co-operation in the digital economy and facilitating the development of cross-border e-commerce, he added.

The Digital China Development Index – which records the country’s digital progress – climbed to 150.51 in 2024, up 10.65% from the previous year, according to the NDA’s national institute for data development.

Jiang Xiaojuan, a professor at the University of Chinese Academy of Social Sciences, said the internet, big data and AI have significantly enhanced the capabilities of data generation, transmission and processing.

However, Jiang said more efforts are needed to accelerate the sharing, development and use of public data and improve data governance systems “to further unleash the immense value of data elements”.

Industry experts also highlighted that AI is spearheading the development of the digital economy, and seamlessly integrating into every facet of industrial development and people’s lives.

Wu Hequan, from the Chinese Academy of Engineering, underscored the significance of advanced digital technologies in improving the production efficiency of enterprises and lowering operational costs, estimating that the revenue from AI software and services is projected to showcase an upward trajectory in the future and will serve as an important driving force for GDP growth.

“The revolutionary advancement of AI technology has become the key to promoting the sustainable development of human society,” said Huo Jia, vice-president of Alibaba Cloud Intelligence Group, the cloud computing unit of Chinese tech giant Alibaba Group.

Huo said the company is ramping up efforts to build intelligent computing power platforms; expand the application of AI models in a broad range of sectors including finance, government affairs, energy and healthcare; and boost industrial digital transformation.

NDB about to enter new ‘golden age’

The New Development Bank (NDB), the financial organisation that promotes the development of emerging markets and developing countries, is set to enter another ‘golden age’ as it advances its investment in infrastructure and innovation with China’s continued support, according to Dilma Rousseff, the bank’s president.

She made the comment after President Xi Jinping’s recent visit to the bank’s headquarters in Shanghai.

President Xi defined the NDB’s first decade from its establishment in 2014 as “a golden decade”, with the bank approving 120 projects and investing $40 billion in that time, according to Rousseff.

Xi suggested that the NDB continue to adhere to the principles that created the bank, which involve investing in the BRICS countries. It should invest in areas, including digital and social infrastructure, that will make a difference in developing countries and emerging economies, said Rousseff, quoting Xi.

The Chinese president underlined the importance of continued investment in innovation and technology, and that the NDB should grow into a modern bank by using all possible digital instruments available, including artificial intelligence and big data.

By keeping the NDB’s commitments, as Xi has suggested, the bank will head for “the second golden decade”, she added.

The NDB was founded by Brazil, Russia, India, China and South Africa (the original BRICS) in 2014 with the purpose of mobilising resources for infrastructure and sustainable development projects in emerging markets and developing countries. It was formally opened in July 2015.

In 2021, the NDB began expanding its membership and admitted Bangladesh, Egypt, the United Arab Emirates and Uruguay as new member countries.

India offers strong growth and stability for investors looking for long-term value, Reserve Bank of India (RBI) Governor Sanjay Malhotra has said.

He said the country continues to be an economy supported by stability, pointing to monetary, financial and political policies; a flexible and supportive business environment; and strong macroeconomic fundamentals.

The Governor said: “At a time when many advanced economies are facing economic headwinds and a deteriorating economic outlook, India continues to offer strong growth and stability making it a natural choice for investors seeking long term value and opportunity.”

Malhotra, speaking in Washington DC at the recent US-India Economic Forum, organised by Confederation of Indian Industry (CII) and US India Strategic Partnership Forum (USISPF), added: “Our strong domestic demand and relatively lower dependence on exports cushions the Indian economy from external spillovers.”

India’s domestic demand contributes about 90% to GDP, whereas merchandise exports contribute about 12% of GDP, which is much lower compared with countries with similar economies.

The Governor highlighted that India offers a policy ecosystem that is transparent, rule-based and forward-looking —ideal conditions for long-term and productive investments.

“As the world’s fastest-growing major economy, India is not just a destination for investment – it is a partner in prosperity,” he said, while asking global investors to collaborate and invest in India.

The country’s financial markets offer seamless entry and exit for foreign investors, reflecting the maturity of its economy, he added.

Malhotra said the country’s banking sector, with its healthy balance sheet, strong profitability, lower non-performing assets and adequate capital buffers is poised to meet organisations’ investment needs.

He said that the Indian economy has seen an average annual growth rate of 8.2% over the past four years (2021-22 to 2024-25).

“Even this year (FY2026), our growth is expected to remain robust at 6.5%. This is despite the tremendous increase in uncertainty and volatility in global financial markets. While this rate is lower than in recent years and falls short of India’s aspirations, it remains broadly in line with past trends and the highest among major economies,” the Governor said.

US – China tariffs ‘could have implications for India’

Worsening trade ties between the United States and China have raised hopes of more US-bound orders shifting to India, with China’s Ministry of Commerce saying it is “evaluating” the possibility of initiating tariff negotiations with the US.

“China has noticed that the senior leadership of the United States has repeatedly stated that it is willing to negotiate with China on tariff issues. At the same time, the United States has recently taken the initiative to convey information to China through relevant parties, hoping to talk to China. In this regard, China is evaluating it,” the Ministry said in a statement.

This comes as Indian exporters have started receiving more orders and inquiries from US clients, amid elevated tariffs on Chinese goods.

Indian exporters told The Indian Express that the availability of shipping containers — which had been a constraint — is beginning to improve due to the cancellation of several Chinese shipments to the US. However, any return to normality between the US and China could slow the shift in business towards India.

Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), said several Chinese exporters have reached out to Indian suppliers for help in fulfilling US orders, as they do not wish to lose their US clients. A deal that results in lower Chinese tariffs may potentially weaken the role of Indian suppliers.

The biggest shift so far has been in the electronics sector. Apple CEO Tim Cook said that the majority of iPhones sold in the US during the third quarter of 2025 will be exported from India. However, he added that he could not offer a longer-term outlook due to the evolving trade war between the US and China, where Apple currently manufactures most of its products.

Richard Baldwin, Professor of International Economics at IMD Business School, said that if high tariffs on China remain, it would be advantageous for large emerging markets.

“China was a big competitor before, and it has now been hobbled,” he said. However, he pointed out that the now-deferred reciprocal tariffs did not cover pharmaceuticals and electronics — two sectors where India could have benefited most.

“From a geo-economic perspective, anything that’s bad for China is good for India,” Baldwin added.

India’s quest for sustained growth over the next two decades will be driven by bold reforms, an enhanced domestic economy and institutional collaborations designed to tackle a fast-changing world, Finance Minister Nirmala Sitharaman has said.

She said the last two Budgets have laid the groundwork for this transformation, with a clear multi-sectoral policy agenda, she said, while speaking at California’s Stanford University.

In the past decade, the government has undertaken structural reforms, rationalising over 20,000 compliances, decriminalising business laws and digitising public services to reduce friction, Sitharaman said.

She further said a significant thrust on infrastructure development has also created a strong foundation for manufacturing-led growth by bolstering investor confidence over the past 10 years.

This has been enabled by a more than four-fold increase in the union government’s capital expenditure between 2017-18 and the 2025-26 Budget, she said.

“Our experience with implementing the Business Reform Action Plan by different state governments has demonstrated that deregulation is a powerful catalyst for industrial growth,” she said.

“Over the next two decades, sustaining India’s growth momentum calls for a fresh approach grounded in bold reforms, stronger domestic capacities, renewed institutional partnerships and adaptive strategies suited for the evolving global landscape,” the Finance Minister said.

India has set a goal to become a developed nation by 2047, the year when the country would enter the 100th year of its independence.

“As we lay the foundation for a developed India, we must stay committed to long-term goals, without losing sight of present realities. The global order is changing. That poses challenges but also opportunities. We must be prepared to tackle the former while seizing the latter,” she said.

Despite the pandemic shock and a banking crisis, she said, India’s “progress over the past decade, anchored in strong macroeconomic fundamentals and steady reforms, gives us confidence and direction for the road ahead”. As a result, she said, India has risen from the world’s 10th-largest economy to the fifth largest.

Quoting a report by Indiaspora and BCG, she said Indian first-generation immigrants founded 72 unicorns between 2018 and 2023 and these unicorns were worth at least $195 billion, employing nearly 55,000 people.

Some of the infrastructure projects in India stand out, such as the country’s Digital Public Infrastructure (DPI), she said.

More than a billion digital identities have been created using DPI, she said, adding, using these digital identities bank accounts of people were created and during Covid-19 pandemic, money was transferred by the government in a click of a button.

“DPI also was useful in administering vaccines during Covid-19 pandemic. In my interactions with the G20, the World Bank or the IMF, this singular population-scale achievement of India is repeatedly lauded,” she said.

Speaking about the government’s thrust on small and medium business, Sitharaman said, a vibrant and thriving network of small and medium enterprises is essential for domestic manufacturing growth.

The government has undertaken numerous initiatives to support MSMEs, from easing access to credit, redefining size thresholds, facilitating prompt payments from large buyers and simplifying compliance burdens, she said.

“The Open Network for Digital Commerce, launched in April 2022, has successfully onboarded more than 764,000 vendors across 616 cities.

“Our next focus is reducing regulatory frictions, digitising approvals, and integrating MSMEs into global value chains. Special support to women-led and rural enterprises will help enhance economic opportunities and ensure more inclusive growth,” she said.

With regard to encouraging and increasing participation of women in the labour market, Sitharaman said, maternity leave has been increased to six months.

“Two years ago, we came up with a scheme where we increased interest rates on deposits made by women to 7.5% to encourage women to keep their savings in banks rather than keeping that as cash at home, she said, adding that property registration in the name of women has tax concessions.