Firms hope for cuts in lending costs

Chinese companies are waiting for a further reduction of lending costs from commercial banks, after the central bank's reduction of an upstream interest rate, because cheaper loans could encourage producers to stabilize investment in the fourth quarter.

The country's new benchmark of lending costs, the one-year loan prime rate (LPR), will be updated on Nov 20, and the market expects a lower rate from October's 4.2 percent.

The expectation came as the People's Bank of China, the central bank, cut the rate of its one-year medium-term lending facility (MLF) loans by 5 basis points to 3.25 percent from 3.30 percent on Tuesday, the first reduction since 2016.