It's an action-packed time for China; a heavily anticipated third-quarter GDP release and surprise rate cut last week, the high-profile Fifth Plenum this week, and signs of success for its push to have the yuan to included in the International Monetary Fund's (IMF) special drawing rights (SDR) basket.
With so much going on in Beijing, CNBC brought in the experts. Here are their thoughts, in their own works, on the key issues impacting the world's second largest economy.
John Silvia, chief economist at Wells Fargo, is skeptical the cuts to China's benchmark one-year bank lending rates and reserve requirement ratio (RRR), plus a hike in the deposit rate, will provide a much-needed boost to businesses.
Is the rate cut and RRR cut the right approach for China?
The transition in China ... could be anywhere between three to five to 20 years. Structural reform, regulatory reform is a long-term structural approach to changing and improving the economy. The interest rate change is more of a cyclical, short-run - what are we going to do now? It will help the property sector. I do think it helps, obviously, equity valuations because you're lowering the discount rate applied to equity earning.
What's the impact on small-to-medium-sized enterprises (SMEs) that are starved for credit?
Those firms that do depend on access to credit, absolutely they are benefiting from that. [But] to what extent are these firms willing to leverage in the economy where it's perceived that economic wealth is more 6 percent than 6.9 percent? I love the term flexible. I mean it basically says yeah we're flexible, more likely flexible down than up. And so 6.9 become 6.5; and you're a small firm, yes, I can borrow. But I'm borrowing now in a smaller final sales expectation environment.
Is the rate cut going to funnel more money into SMEs?
Well, the question is 'are the banks willing to raise those deposit rates to attract capital?' They'll only do that if they perceive that they are going to be able to use that money. If the economy has indeed slowed then expectations are probably more muted in terms of how are you going to use that capital. So I would say that I would be skeptical on the argument that the money's going to show up in the SMEs.