蒋飞：论降息的重要性

Core Viewpoint - The discussion on whether to continue interest rate cuts after the central bank's reduction on May 8 remains ongoing, with optimists believing the economy has stabilized and pessimists arguing that economic pressures persist, indicating that the rate-cutting cycle is not over [1][3] Long-term Importance of Rate Cuts - Since 2018, China has entered a long-term interest rate cut cycle, which is expected to continue due to ongoing adjustments in population, debt, and real estate cycles [4] - The population is projected to decline, with a decrease of 1.39 million in 2024 compared to 2023, and a forecasted reduction of 20.4 million by 2054, impacting long-term economic growth [4] - The macro leverage ratio is approaching critical levels, with a projected 298.4% by Q1 2025, necessitating debt management strategies supported by interest rate cuts [4][5] - The real estate market is still adjusting, with the price-to-rent ratio remaining high, indicating potential downward pressure on housing prices until a more stable equilibrium is reached [5] Short-term Importance of Rate Cuts - The need for stable growth remains crucial, especially in the context of global economic uncertainties and rising protectionism, which necessitates internal stability [7] - The real estate market's recovery is contingent on continued interest rate support, as housing assets constitute 66.8% of urban residents' total assets, significantly influencing consumption and investment [8] - A strong savings tendency among residents has led to a disparity between loan and deposit growth rates, indicating a need for lower interest rates to stimulate demand [8] Issues Not Resolved by Rate Cuts - Rate cuts do not address the issues of ineffective interest rate transmission, as the market remains segmented and the sensitivity of loan rates to market rates is low [10][12] - The persistent rise in leverage ratios is not solely a result of low interest rates; rather, it is influenced by investment efficiency and institutional frameworks [10] - The narrowing of banks' net interest margins is attributed to supply-demand dynamics in the banking sector rather than solely to interest rate reductions [11] - The widening of domestic and international interest rate differentials is influenced by differing economic conditions, necessitating a focus on domestic monetary policy rather than maintaining international rate parity [12] Remaining Space for Rate Cuts - There is still room for further interest rate reductions, with projections indicating that to maintain the government leverage ratio by 2025, the real interest rate should decrease to 0.32%, significantly lower than the current rate of 4.52% [13]