Why China Made the Right Call on Interest Rates

CHINA has cut interest rates for the first time in more than two years, a powerful signal that the government wants to step up support for the slowing economy. As fate should have it, a rate cut was the very thing we had called for in our leader on Chinese monetary policy this week. But we cannot claim to be clairvoyant. We had not expected the central bank to move so quickly. Nor, for that matter, had most analysts or investors â?? hence the big gains for stocks, commodities and currencies sensitive to Chinese demand in the hours following the announcement.