Stockmarkets are rejoicing. As Hong Kong’s market reopened on October 2nd after a public holiday, shares rose by more than 6%, capping a rally of over 20% in a mere six frenetic trading days. But China will need even more stimulus to escape from its deflationary trap.

China's latest stimulus package may not be enough to encourage households and businesses to borrow and banks to lend, one researcher says.

For banks, the lower mortgage rates could hurt profits in the short term. China’s drastic fiscal stimulus measures could revive an economy weighed by weak domestic spending and a troubled real estate sector,