Recently, there have been online articles suggesting that the People's Bank of China should significantly lower interest rates, but hesitates, resulting in high real interest rates. It is suggested that the central bank should significantly lower nominal interest rates by at least 70BP (basis points). Zhou Qiong, a financial practitioner and specially appointed senior researcher at the Shanghai Finance and Development Laboratory, stated that proactively and significantly reducing policy interest rates may not be the solution to China's current economic problems. From the reasons for proposing interest rate cuts, including stimulating investment and consumption, reducing the interest burden on debtors, and stimulating the stock market, Zhou Qiong pointed out that in order to achieve these goals, the positive effects of interest rate cuts are not significant, and its negative effects should be seen. Zhou Qiong stated that from the perspective of investment, the Chinese real estate market is still undergoing adjustment. Currently, there is an oversupply of real estate, and it is necessary to stimulate consumption, digest inventory, and ensure the delivery of properties under construction that have already been presold. Infrastructure investment can quickly boost GDP, but it comes with debt. Local governments and urban investment companies bear most of the responsibility for urban infrastructure construction, which also creates huge debts. The pressure of local debt risk is still high and needs to be resolved. Of course, there are areas with insufficient supply, from healthcare to safe food. But none of these can be solved by lowering interest rates Zhou Qiong said. From the perspective of consumption, Zhou Qiong pointed out that there is currently limited room for Chinese residents to increase leverage. Although China's residents have a high savings rate, the level of social security in China is still lower than in developed countries, and residents need more precautionary savings. She also bluntly stated, "Of course, if the economy fails to improve, the central bank will continue to lower interest rates depending on the economic and financial market conditions, but at the current low nominal interest rate level, the downward space is also relatively limited. If there are signs of economic improvement, interest rates may also rebound
Edit：NingChangRun Responsible editor：LiaoXin
Source：China News Service Website
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