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BEIJING, Sept. 21 -- China's interest rates will step onto a downward streak in the long run due to the economic growth slowdown, which will be a boon to the stock market, an economist has said.
Li Xunlei, chief economist of Haitong Futures, said the interest rates will end the rising momentum after the early stage of liberalizing period as companies of real economy cannot stand the current level.
"The interest rates and stock market are closely related," Li said. "The bearish A-share market after 2009 partly resulted from the rising interest rates."
"The stock market will be a main investment destination in the future as abundant capital will retreat from financial investment and trust products," he predicted.
China's central bank has injected 500 billion yuan (81 billion U.S. dollars) into the nation's five major state-run commercial banks, which, Li said, marked the attitude of the central bank to lead the interest rates to a falling track.
He called for the acceleration of establishing local financing platform and reforms of state-owned enterprises to push ahead with interest rate liberalization.
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