The Chinese central bank announced that it is to release a batch of monetary and financial measures, which will include interest rate cuts on structural policy tools. Among which, there will be a cut to one-year relending facilities to 1.25% from 1.50% previously.For some context, the move here is in response to this: China new bank lending stumbles once again in 2025A cut to the relending rate isn't so much so going to help bolster domestic demand, so that's still going to be an issue. And in my view, it is arguably Beijing's main problem still as they are unable to find targeted measures to deal with that.However, what the central bank is doing here is to provide banks with cheap liquidity by lowering their cost of funds. In turn, that hopefully will enable banks to incentivise lending especially to smaller and medium enterprises.In other words, the move here is a targeted supply side solution to the problem. But as mentioned above, it still doesn't address the demand side of the equation.The property market crash, weak credit appetite, and financially struggling smaller firms are all still an issue that Beijing has to find solutions to fix in order to get things back on track. This article was written by Justin Low at investinglive.com.