Should China accept zero interest rate?

The release of China’s second quarterly growth data has embodied a dilemma for the country’s politicians this week: True economic expansion It was strong and sustainable, but 5.2 percent, but widespread prices, the nominal growth is weaker than 3.9 percent, he said.

Solid real growth reflects the expansion of the Chinese industry and exports – but are nominally growth, Chinese employees are the things they see on salary packages and Chinese companies.

In addition, when deflation is taken into account, it also has a steady-controversial controversy with interest rates, whether China is subject to the path of Western peoples and accepting the zero interest rate.

“There is a consensus between politicians and politicians where zero interest rates can occur in China,” he said. “But most politicians, as well as market and investors, gradually accept that interest rates are very low.”

Great for two historical precedents ChineseAccording to more than one scientist and state-related policy professionals.

One is a period of zero interest rate in the United States and Europe, as an event done by some of some in 2008, as an event carried out as an event that is inflated by active bubbles and fixed markets.

Another is stagnant in Japan’s decades after the real estate bubble exploded in 1990 – I would like to prevent China. His own real estate slip has been dragged since 2020.

In views, these disagreements have become a block for China’s monetary policy and can cause the duration of any change, the United States for its sharp and tariff decisions to protect Peckin and tariff decisions.

A camp wants China to refinance and refinancing local governments and refinancing and re-financing and enhancement.

“Zero interest rate should not be inconceivable. Although it cannot go to zero, at least 0.4 percentage points will be cut for alignment with a financial plan,” he said, China MA at the International Finance Institute

The central bank benchmark, a number of gradually after cuts, the reverse repo rate of the seven-day, now stands 1.4 percent.

“China has a significant place for the state investment to reach potential growth. Dee rate cut, combined with financial expansion, it can help unlock.”

China’s 10-year-old government bond was hovering around 1.7 percent near historical landing, the investor’s sustainable disinulation expectations.

A second camp in Beijing opposes the official zero interest rate policy. The biggest anxiety is the banking sector. The difference between China’s creditors, debt and credit rates trust the difference between earnings and credit ratios.

The average interest margin in China’s top six state lenders fell 1.48 percent in the first quarter The lowest level of recordCompared to more than 2 percent in 2021.

Zero interest rates will make the bank edges more often in a time where many of the activity has already deteriorated activity and Rising defaults in the property sector.

“The last question asked before deciding (to accept zero prices): What should the millions of depositors trust in the interest of mass bank deposits?” He said a consultant who got acquainted with the dispute. “This is not an economic question, but a political political.”

Some advisers claim that the country is already a facto zero interest mode, because China’s banks are directly reported directly on credit prices – in recent years have reduced debt expenses over a period of time.

“China’s monetary policy is already very close to zero interest policy,” Chen long, the founder of Beijing-based advice plenum. “The Federal Reserve for households and enterprises conducts zero interest rate policy in the United States, the US interest rate environment is the same.”

Opposition groups also warn that zero rates can distort the economy in a long period of time and China is bad extreme difficulty.

“China is an exchange for the supply and the lack of internal consumption with the requirement side and negative ratios, more sensitive to investment consumption, the supply of supply in Crédit Agricule can worsen the balance of supply.

Households, which are decreased by property and the country’s economic worldview, continue to build reserve measures with RMB147 ($ 20TN $ 20TN).

Additional prospects for interruption asked to lock higher interest rates on many protectors. The interest rate on the deposits required in Chinese banks is 0.05 percent, and one year deposits give 2 percent.

“It falls short to deliver a short place to deliver the intended goals as low interest rates, low interest rates increase consumption, but looking for address, but also an analytics in Morgan Stanley.

Behind the scenes, the People’s Bank of China drew attention to the planning side of the scenario. Have Silently looking for guidance Having experience in managing a low-level environment stretching from European institutions.

As discussions Grinds, a larger question of question: Can the Chinese economy cost delay?

“Without a strong policy without a strong policy, it is difficult to escape the continued deflation spiral,” he said. Larry Hu, in Chinese economist in Hong Kong