That interest rates

 Consecutive rate hike last year to raise bank reserve ratio in the case, in September 2008 the central bank decision to cut interest rates, which can not be said of the current economic background of the environment.
The United States by the subprime mortgage crisis, Wall Street,bailey UGG boots, many financial institutions become a U.S. state-owned enterprises; domestic CPI unexpectedly fell in August to a 14-month low - 4.9%; international crude oil prices fall; domestic stock prices continued to fall.
in such a background, we can see Now we are short of money, a serious weakness in investment.
First, the international crude oil prices, indicating that less money for oil speculation.
Second, the stock and property markets are cooling, indicating that the international financial institutions, foreign hot money hot money, and domestic investment are now tightening the money supply or the flight of the.
Third, CPI's fall is that to ease liquidity, but, on the other hand, also because a lot of money no longer invest in the domestic market caused by the withdrawal of The excess liquidity course not, but the contrary is the economic downturn.
global financial crisis in the United States pay the bill, China, Japan and Europe hold large amounts of U.S. bonds, 1.8 trillion foreign exchange reserves, of which part of the United States bonds, now the U.S. government to spend a lot of money into the brink of bankruptcy, Fannie Mae, Freddie Mac, Lehman, AIG and so on, where's that money?
no doubt that the central bank cut interest rates to stimulate the the domestic economy, and other countries, there is nothing strange, but in such a short lapse of time, interest rate cut within, the effect will be like then?
China's economy by the Troika, the people know: foreign trade, investment and domestic demand, foreign trade, it means and the other can be greatly eased inflation; 而 investment mainly is foreign capital into China market, some of China's low-cost value, some value the yuan appreciation is expected, there is a huge domestic market value; Er domestic demand means that domestic production and consumption levels of prosperity, that is, the functioning of their economies. At first, we mainly through foreign trade and investment have been greatly developed, rapid accumulation of wealth, but, with the drawbacks of economic globalization, the emergence of more and more to reflect the importance of domestic demand Once abroad, the economic crisis, weak domestic demand and can not support stable economic growth, will inevitably lead to serious consequences.
we say the central bank cut interest rates to stimulate the economy, said more bluntly, in fact, cut interest rates to stimulate domestic demand, while domestic demand will thus excited you?
First, we face the problem gap between rich and poor, that is, the money in a few hands, so the real needs of consumers is difficult to expand.
Second, we urbanization is far from in place,UGG bailey button, there are lots of low purchasing power of the population.
Third, the stock market downturn, investment returns pessimistic, property prices high,UGG boots, and ordinary people to bear. solely from both investment and consumption to active Xing is not high.
Therefore, the role of interest rates on domestic demand for at least the surface are not good.
then look at the foreign trade and investment, RMB appreciation, rising labor costs, coupled with the financial crisis in the West the impact of foreign trade, or slowly now sought after by a lot of money and investment caused by high prices to come down, to the left to the rigidity of the real needs of a rational market space. Now is not the ordinary people to buy or not to buy up the issue, is simply not afford to buy problem, we can not allow people to buy a house when the house all the slaves, right? In that case, the prosperity of domestic demand even more difficult. down to what extent? Maybe 05 years is relatively safe and reasonable level, at least the average price drop to the yuan.
second is to increase the income of ordinary people, should speed up the adjustment of personal income tax, lower income costs, Huanjie the pressure, so that master a large handful of people of wealth, to subsidize those with low incomes, which that is to promote the healthy development of social economy, but also a good way to enhance social responsibility.
third is to accelerate economic restructuring, so that production of the domestic economy continue to shift to the upstream industry chain and improve R & D capability and independent intellectual property rights, brand and core technology in their own hands, we abandon a market so large,cheap UGG boots, perfectly placed to get rid of external economic dependence, let us develop a more stable and secure.