BEIJING — China cut bank-reserve requirements for the first time in nearly three years, suggesting leaders of the world's second-largest economy see a rising threat from slow global growth.

Some economists were expecting a move in what's known as the reserve requirement ratio by the end of the year. But the timing of Wednesday's move likely will come as a surprise for global markets, underscoring concerns about China's slowing growth trajectory.

The People's Bank of China, China's central bank, said Wednesday it will cut the reserve requirement ratio for banks by 0.5 of a percentage point, the first such cut since December 2008. The move essentially frees up banks to lend additional money.

The move late Wednesday local time cheered European markets, with the benchmark Stoxx Europe 600 index up 0.8% midday, while London's FTSE was up 0.8%.

The move suggests that government's policy focus is shifting toward promoting economic growth from controlling inflation, said HSBC China economist Ma Xiaoping. China so far has been focused on fighting inflation, tightening constraints on the economy while still continuing to seek steady growth, a scenario economists call a soft landing.

But Beijing's ability to pull off a soft landing has been in doubt amid Europe's continued debt crisis and soft global economic growth. Earlier this month, an initial reading for purchasing managers surveyed by HSBC showed output in the all-important manufacturing sector shrinking month-to-month. Exports have also slowed.

"The data for the last few weeks has been bad," said Mark Williams, China economist at Capital Economics. "There's zero growth in property starts, electricity output growth has slowed, the export numbers for November will be awful, and they may have had a sneak preview of that. All of these things could have triggered a shift in policy."

Wednesday's move will take the reserve-requirement rate to 21% for major banks. It will free up around 390 billion yuan (about $61 billion) in funds for the banks to lend, according to calculations by The Wall Street Journal based on data on bank deposits in October.

China's top leaders have been hinting for several weeks that policy will be fine-tuned to support growth. But up until now, China has resorted to targeted easing to prop up small manufacturers under stress without loosening overall monetary policy. Last month, the state council, China's cabinet, unveiled a set of measures aimed at making more funds available to small businesses in the wake of a slew of bankruptcies by factory owners in the coastal city of Wenzhou, which is seen as a bellwether for China's small and medium-sized manufacturers. Most recently, it has reduced the reserve requirements for some rural cooperatives in east China's Zhejiang province.

Many China watchers have said the country would be slow in easing credit access as it still is dealing with the negative effects from a massive stimulus package Beijing unleashed following the 2008 global financial crisis. But recently, inflation has eased while economic growth has continued to slow due to tight credit at home and slumping demand overseas.

The cut in reserve ratio "is a clear signal that Beijing has decided that the balance of risks now lies with growth, rather than inflation," said Stephen Green, regional head of research in Greater China for Standard Chartered, in a note following the PBOC's move. Green predicts that China will reduce the reserve ratio again in January due to a potential liquidity crunch coming up before Chinese New Year.

In recent months, capital flows into China have slowed amid general unease over the global economy, worries about China's slowing growth and reduced expectations for appreciation of the yuan. In October, China recorded its first monthly outflow of foreign currency since 2007.

The PBOC has raised the reserve requirement ratio six times so far this year, and has raised benchmark lending and deposit rates five times since October last year to combat stubbornly high inflation. The previous reserve ratio increase took effect June 20, and the last interest rate hike was effective July 7.

There will likely be more such reserve ratio cuts, with one more cut of 0.5 percentage point coming as soon as the beginning of next year, said Yao Wei, China economist with Societe Generale, adding that she doesn't expect any interest rate cut in the next six months.

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