Global central banks are tightening liquidity to fight inflation, while 中国 China's central bank is loosening liquidity to combat deflation. But the central bank is facing a tough situation: the faucet is turned to the max, yet the money isn’t flowing out. It’s not that the central bank isn’t releasing enough liquidity—it’s that the old pipes are rusted shut, and the new pipes haven’t been connected yet. In the past, liquidity relied on 'real estate + infrastructure.' Now, houses aren’t selling, companies aren’t buying land, and people are paying off their mortgages early. This old pipeline is completely clogged. What about the new pipeline? Tech innovation, new productive forces—but these companies are asset-light and have no collateral, so traditional bank credit can’t support them. The money ends up stuck in banks, turning into long-term deposits. Let’s look at two sets of data: M1 growth is only 4.0%. Money is just sitting in accounts—businesses aren’t expanding production, and residents aren’t spending. Household loans have decreased by 366.8 billion. Everyone is desperately saving money and paying off debt. This is the most real dilemma of China’s financial system: The central bank is stepping on the gas, but microeconomic entities are pulling the handbrake. The liquidity is there, but no one dares to take it. Why? Because there’s no confidence in the future, no expectations for income. When will this end? Watch for two signals: when the real estate market truly stops declining and stabilizes; and when tech and advanced manufacturing can absorb the money overflowing from banks and become the new main arteries. Until these two things happen, all rate cuts and reserve requirement reductions are just CPR for the old pipes. The essence of stimulus has never been about printing money—it’s about rebuilding confidence. China’s central bank is spinning in circles right now