Analysts have long predicted that China’s slowing economy would be short-lived.
That prediction was borne out in early March, when the People’s Bank of China cut interest rates, a major event that was widely expected to benefit the economy.
The move signaled that the Chinese government has no intention of slowing down and the central bank did not expect China to be able to sustain its slow growth rate indefinitely.
China has been slow to recover from the 2008 global financial crisis and its recent stimulus package has only increased the country’s debt burden.
Analysts expect China’s economy to rebound from the March interest rate cut but say the Chinese central bank’s actions are likely to dampen growth and the outlook for inflation in the long term.
The central bank has said it will keep a lid on interest rates in order to preserve financial stability and prevent an overheated market from harming the economy in the short term.
China’s main benchmark stock index, the Shanghai Composite Index, has declined more than 30 percent this year, with the Shanghai Index falling more than 10 percent in January.
The Shanghai index has fallen nearly 20 percent since the end of last year.