China’s Interest Rate-Pivot Risks Following in Japan’s Footsteps
Pedestrians along an elevated walkway in Shanghai’s financial district. Efforts by Chinese banks to spur growth may have the opposite effect, financial experts warn.
Photographer: Qilai Shen/BloombergA headline on China’s economy this week stated that the nation’s big, state-owned banks would be reducing interest rates on deposits in order to bolster growth.
That may have sounded odd to some ears. After all, there’s probably never been a headline saying JPMorgan Chase & Co. will be reducing what savers can earn on their deposits in order to shore up US growth. Or Deutsche Bank AG for Germany. In fact, Germans have for years been complaining that low rates on savings have been economically damaging, especially for older folks with large amounts on deposit.