China yesterday surprised markets by cutting its seven-day reverse repo rate from 1.8% to 1.7% and lowering benchmark lending rates, with the one-year loan prime rate falling to 3.35% and the five-year rate to 3.85%. This move follows weaker-than-expected economic data for the second quarter and comes after a key government plenum. The rate cuts aim to boost economic growth amid deflation risks, a protracted property crisis, rising debt, and weak consumer and business sentiment. Market expectations suggest further rate reductions might follow as China responds to economic pressures.