Two weeks ago the People's Bank of China announced this year's sixth interest-rate cut. Each announcement has brought limited relief to the many corporate and local-government borrowers struggling with a phenomenon China hasn't seen in nearly two decades: high real interest rates.

Up until 2012, Beijing practiced a development policy known as financial repression. Through the PBOC, it directed the banks that held a rapidly growing pool of household savings to lend at interest rates far below the country's growth rate, and often below the inflation rate, and to pay depositors even less. This benefited borrowers at the expense of savers.

Read more at: http://carnegieendowment.org/2015/11/04/in-china-lower-rates-but-rising-worries/ikxs