Global Economic and Policy Updates: China's Liquidity and US Immigration Changes

The People's Bank of China has injected significant liquidity into its banking system in preparation for a national holiday, signaling an expansionary monetary policy. Concurrently, the US government has implemented sudden and unclear changes to H-1B visa and green card policies, which are expected to create confusion and potentially harm key sectors of the American economy.

Key Points Summary

• China's Central Bank Monetary Policy

  The People's Bank of China (PBOC) injected approximately 300 billion yuan via 14-day reverse repurchase agreements and 240 billion yuan via 7-day reverse repurchase agreements into the banking system. This significant liquidity injection anticipates the week-long National Day holiday (Golden Week from Oct 1-8), aiming to meet increased cash demand and allow banks to strengthen their balance sheets by the end of September. The PBOC now utilizes the 14-day reverse repo tool with greater flexibility, not solely for holiday periods, which signifies a shift towards a relatively expansionary monetary policy. Recent changes in the auction method transformed from a fixed rate/variable volume to a fixed volume/competitive multi-price rate, requiring banks to bid for the liquidity rate.

• Implications of China's Policy Shift

  The increased liquidity within the banking system is expected to facilitate easier lending, thereby supporting consumer spending and travel during the holiday week. For financial markets, this action demonstrates the central bank's readiness to swiftly inject liquidity during critical periods. The policy adjustment, particularly the preference for shorter-term tools over substantial interest rate cuts, suggests a strategic recalibration of monetary policy designed to sustain economic growth.

• US Immigration Policy Changes (H-1B Visas)

  The Trump administration suddenly announced a substantial increase in the H-1B work visa application fee to approximately $6,000, which is significantly higher than previous costs. This decision is presented as a component of a broader policy aimed at protecting American jobs and national security. The immediate implementation of this policy, coupled with a lack of initial clear details, caused widespread confusion, particularly regarding its applicability to existing visa holders versus only new applicants; the White House subsequently clarified it applies to new applicants for future lotteries.

• US Immigration Policy Changes (Green Card / 'Golden Card')

  A 'Golden Card' initiative was also unveiled, proposing permanent residency for individuals willing to make a $1 million investment. This policy was also introduced abruptly with limited initial clarity regarding its specifics.

• Impact of US Immigration Policies

  These new immigration policies could severely impact sectors heavily reliant on immigrant labor, including technology (companies like Google, Apple, and Meta), construction, universities, and hospitals, which employ thousands of foreign engineers, researchers, and medical professionals. Universities and international students, for whom the H-1B visa is often the only pathway to work in the US after graduation, face heightened uncertainty. The considerable fee increase is anticipated to reduce the demand for the annual 85,000 H-1B visas, contrasting sharply with the over 470,000 applications received in 2025.

• Criticisms and Psychological Effects of US Immigration Policies

  Legal experts contend the H-1B fee increase is unlawful, arguing that visa fees should be based on actual processing costs, not arbitrary amounts, and that the required public consultation was bypassed. The psychological impact on foreign students and workers has been profound, leading some to cancel travel plans or contemplate returning to their home countries. Significant confusion has been observed at airports, particularly in San Francisco, and some individuals have reduced their social media activity due due to government monitoring of online profiles. In the long term, these policies risk hindering the US economy, especially in the critical tech and health sectors, by deterring specialized talent.

• Upcoming Economic Outlook

  No significant economic data releases are scheduled for the remainder of the day. However, statements from former President Trump continue to hold considerable importance. Speeches by Federal Reserve members later today will be closely monitored for insights into the labor market, inflation status, tariff policies, and the Fed's priorities regarding price stability versus employment.

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