Opinion: Why China’s Bank Deposit Rates Should Fall

The deposit-loan gap might not be a regular topic of dinner table conversation, but this arcane financial metric deserves a lot more attention from China’s policymakers.

The size of this gap, defined as the amount of yuan deposits that financial institutions take in minus the amount of yuan loans they hand out, has grown significantly over the last year or so, reaching 47.3 trillion yuan ($6.8 trillion) at the end of April, the second highest in available data going back to 1998.