China may need a back-up plan to stop economic growth being cut short by a surprise dip in demand at home and abroad that suggests monetary policy easing steps taken since the final quarter of last year are insufficient to deal with the downturn.

The People’s Bank of China cut the amount of cash that banks must hold as reserves on Saturday, freeing an estimated 400 billion yuan ($63.5 billion) for lending to add to the roughly 800 billion injected in two previous 50 bps cuts since the government tilted its policy stance towards growth in October.

The move came after data on Friday showed the economy weakening, not recovering, from its slowest quarter of growth in three years. Industrial production growth slowed sharply in April and fixed asset investment – a key growth driver – hit its lowest level in nearly a decade, confounding economists expecting signs of a…