China is pulling out all the usual easing props to counter its slowing economy, but the old hats don't appear to be working as well as they used to.
"The sluggishness of China's economy reinforces our view that further easing measures will be needed," economists at Read MoreANZ said in a note Thursday. "However, the monetary easing so far appears to have limited impact on the real economy, indicating that the policy transmission process has been ineffective."
Earlier this month, a slew of data, including industrial output and retail sales, missed analysts' expectations. In the first quarter, China's economic growth slowed to 7.0 percent, its slowest in six years. China's economy expanded 7.4 percent in 2014, its slowest pace in 24 years and undershooting the government's target for the first time since 1998.
So far, the People's Bank of China (PBOC) has cut interest rates three times in the past six months amid concerns that the government's annual gross domestic growth (GDP) target of "around 7 percent" could be at risk. The latest rate cut followed two rounds of cuts in the reserve requirement ratio (RRR) of major banks, the latest one bringing the rate down to 18.5 percent.
Despite the easing measures, even China perma-bull HSBC has cut its outlook, lowering its GDP growth forecast for this year to 7.1 percent from 7.3 percent.
HSBC expects the PBOC will deliver another 50 basis points in policy rate cuts, up from its previous forecast for 25 basis points, and 250 basis points in RRR cuts, up from its previous 100 basis point forecast.