Seek the Feasibility of Implementing Negative Interest Rate Policies in China from the Implementation Status of Global Negative Interest Rate Policies

After the 2008 global financial crisis, the world economy slipped into a prolonged slump, with traditional macroeconomic regulation and monetary policies proving largely ineffective in countering such a severe economic shock. To restore the economy quickly and effectively, people tried the negative interest rate policy for the first time, and the world officially entered the era of negative interest rates. In July 2009, in response to the economic recession caused by the subprime mortgage crisis and to prevent deflation, the Swedish central bank lowered the seven-day repo rate to 0.25% and the overnight deposit rate to -0.25%, marking the first negative interest rate in the world. Having also been hit hard by economic shocks, China is in need of more robust macroeconomic tools to cope with such challenges and revitalize its economy. This article explores the feasibility of implementing a negative interest rate policy in China by reviewing the implementation of negative interest rate policy in Europe nations and Japan, and concludes that it is not the best solution for China to adopt negative interest rate policy at this stage, but there is still a possibility of adopting or passively adopting this policy in the future.