Cut interest rates, stop beating around the bush. It's a simple thing, why make it so complicated? Isn't it just spinning a cocoon around oneself? Is it really that hard?

　　Finance is like water.
　　Tang Shuangning even wrote a beautiful prose with this title. The words flowed like clouds and water, smooth and delightful, the feeling naturally perfect, intoxicating.
　　Tang Shuangning is currently the chairman of Everbright Group and formerly vice chairman of the China Banking Regulatory Commission. He has been immersed in China's banking system his entire life, and his understanding and affection for finance have become part of his soul, hence such sincerity.
　　Finance is like water.
　　Water has no form yet has form; it can drift with the current or forge ahead against the rapids; it can sail against the wind or push the boat along with the current; water is both powerful and powerless—when powerful, it crashes against the shore and rolls up thousands of snowflakes; when powerless, it wears through stone with dripping water, leaving eternal sentiment. But whether formless or formed, powerful or powerless, water has one basic characteristic: water always flows to the lowest place.
　　Water knows to flow to the lowest place, so what about finance, which is like money?
　　Money only flows where there is profit to be made, to value depressions, to places with high returns, just like water.
　　Water is water; there is no writing on water's face, nor on money's face. Money is money, just like water. Money that enters circulation is inevitably profit-seeking money. Even if the central bank's subjective wishes are beautiful and targeted reserve requirement cuts are ideal, the reality is that once loans leave the bank, the central bank cannot control where the money goes. The financing difficulties of small and medium-sized enterprises cannot be solved by targeted reserve requirement cuts alone, given that total social financing is limited and financing costs are so high.
　　Of course, we should affirm and praise every effort by the central bank, because after all, each effort is in the right direction, each advances a step on the correct path, and each proves the correctness of the previous step but is insufficient to solve the problem. If we observe the latest ten measures from the State Council executive meeting with this logic, we will reach the same conclusion, although public opinion comments that the intensity is unprecedented and the effect is close to an interest rate cut.
　　The new ten measures are as follows:
　　First, continue to adhere to a prudent monetary policy, maintain reasonable growth in total credit, focus on adjusting the structure, and optimize credit allocation. Increase re-lending and rediscounting to support agriculture and small businesses, and improve financial services for small and micro enterprises, agriculture, rural areas, and farmers, and support key areas such as the service industry, energy conservation and environmental protection, and major livelihood projects. Second, curb unreasonable increases in financing costs for financial institutions, contain disguised high-interest deposit-taking, and maintain a good financial market order. Third, shorten corporate financing chains, clean up unnecessary links, and rectify layer-by-layer price increases. In principle, funds from wealth management products should be directly linked to the real economy. Fourth, clean up and rectify unreasonable charges, and cancel all fees directly linked to loans that have no substantive service content. Standardize fees for guarantees, assessments, and registration. Strictly prohibit practices such as "converting loans to deposits" and "linking deposits and loans." Fifth, optimize commercial banks' management of small and micro enterprise loans, adopt methods such as early approval for loan renewals and establish revolving loans to improve loan approval and disbursement efficiency. Implement differentiated regulatory requirements for small and micro enterprise loans. Sixth, actively and steadily develop specialized small and medium-sized financial institutions serving small and micro enterprises and agriculture, rural areas, and farmers, accelerate the promotion of qualified private capital to initiate the establishment of small and medium-sized banks and other financial institutions in accordance with the law, promote market competition, and increase financial supply. Seventh, vigorously develop direct financing, develop a multi-tiered capital market, support small and medium-sized enterprises in financing through the National Equities Exchange and Quotations, and expand the tools and scale of debt financing for small and medium-sized enterprises. Eighth, improve the assessment and evaluation index system for commercial banks, and guide commercial banks to correct the behavior of purely pursuing profits and comparing asset scale expansion. Ninth, vigorously develop insurance products that support small and micro enterprises in obtaining credit services, and carry out "insurance + credit" cooperation. Actively develop government-supported guarantee institutions and expand the scale of guarantee business for small and micro enterprises. Tenth, orderly advance interest rate marketization reform, fully leverage the self-discipline mechanism of financial institutions' interest rate pricing, strengthen hard financial constraints, and improve independent pricing capabilities. Taking into account China's macroeconomic and microeconomic and financial situation, improve the market interest rate formation and transmission mechanism. The meeting required that relevant departments promptly formulate and implement supporting measures, regularly supervise and inspect, introduce third-party assessments, and ensure that policies are implemented as soon as possible and achieve practical results.
　　Shui Pi would like to point out that measures to forcibly reduce social financing costs are unprecedented, and indeed grasp the essence of the problem. To put it more bluntly, the so-called social financing cost is the actual market interest rate. When the market interest rate comes down, social financing costs come down, and usury also comes down. If the actual market interest rate remains high, not only will financing costs not come down, but usury will also intensify, ultimately leading to a Chinese-style financial crisis and social crisis.
　　Cut interest rates, stop going in circles. It's a simple thing, why make it so complicated? Isn't it just spinning a cocoon around oneself? Is it really that hard?