Negative interest rate refers to the fact that under certain economic conditions, the deposit interest rate (often referring to the interest rate of one-year fixed deposit) is less than the increase of CPI in the same period. At this time, with the passage of time, the purchasing power of residents' bank deposits gradually decreased, which seemed to be "shrinking", so it was figuratively called negative interest rate. Under the condition of negative interest rate, residents are more willing to preserve and increase their own property through various other financial channels, such as buying stocks, funds, foreign exchange, gold and so on. The so-called negative interest rate, that is, the rapid rise of the price index (CPI), leads to the negative interest rate of bank deposits. The deposit bank's interest rate can't keep up with the inflation rate, so it becomes a negative interest rate. Real interest rate = nominal interest rate-inflation rate. Negative interest rate = bank interest rate-inflation rate (that is, CPI index that is often heard).

Negative interest rate-the economy affects less and less deposits

Negative interest rate makes money shrink

The most intuitive effect of negative interest rate is that residents' deposits in the bank will shrink more and more. At present, residents' savings deposits are 29 trillion yuan, and the interest rate is at least 3 percentage points lower than the neutral level, which is equivalent to an increase of about 9 billion yuan in residents' annual income. Since it is not safe to put money in the bank and it will evaporate in vain, taking it out is the best way. However, there are quite a few bank deposits that can't be withdrawn, that is, the "compulsory savings" of low-and middle-income people. They can't and dare not consume, let alone turn them into investment. Of course, their little money is not enough to invest. Especially the farmers, because the money is saved for providing for the aged and saving their lives, or needed in case of emergency at any time, they can't use it unless they have to. Therefore, in a sense, negative interest rate, as a wealth redistribution tool, will further plunder the poor wealth of the disadvantaged groups in society.

The price is pushed up further

The long duration of negative interest rate will easily lead to an investment bubble

Rich people will certainly not just watch their money evaporate in the bank, so they will definitely try their best to seek investment. However, the current investment channels in China are actually relatively simple, and most of the rich people turn their attention to the stock market, the property market and the futures market. This is also supported by survey data. According to the observation of Yin Zhongli from the Institute of Finance of China Academy of Social Sciences, when the price rose rapidly in 27 and the negative interest rate became more serious, the real estate market in China just ushered in a period of soaring prices. "In 27, the CPI exceeded the key point of 5% in July and reached 6.5% in August. In contrast, the China stock market rose by 17% and 16.7% respectively in these two months, and house prices also soared." Yin Zhongli said. Therefore, it is generally believed that negative interest rate is the real murderer behind high housing prices.

The asset bubble started flying around in 23. In the past seven years, the real one-year loan interest rate in China was 2.6% (according to official statistics, the average annual CPI increase was 2.7%), so individuals and enterprises who can borrow money can get money at almost no cost. In 29, not only did the central government launch a huge investment plan of 4 trillion yuan to stimulate the economy, but also bank credit surged by 1 trillion yuan that year, setting a record high. Low interest rates induce huge credit demand and capital demand, and cheap-money policy has released huge liquidity. When hot money and hot money are rampant, speculation will be even crazier and more rampant. At this time, speculative profits far exceed the return on investment, and industrial capital is threatened. The typical representative of this is the real estate industry. According to the data of the People's Bank of China, as of the end of 29, the balance of real estate loans accounted for 19.2% of all loan balances, 1 percentage point higher than the end of last year. In 29, new real estate loans amounted to 2 trillion yuan, accounting for 21.9% of all loans, accounting for more than 11 percentage points higher than the previous year and 1.5 trillion yuan more than the same period last year. Among them, personal housing loans increased by 1.4 trillion yuan, about five times that of 28 and twice that of 27.

In the era of negative interest rate, the money of ordinary people is evaporated and shrunk in banks. On the other hand, it is actually local governments and state-owned enterprises that can get a lot of loans from banks, so such large projects and empty projects are common. According to the Report on Regional Financial Operation in China in 29 released by the Central Bank in June, the loans in 29 were mainly invested in infrastructure industry, leasing and business services, real estate industry and manufacturing industry, and actively supported the construction of infrastructure and key projects.

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