As shoring up the capital market emerges as an increasingly important policy objective for China, Zhang Bin, a senior researcher at the China Finance 40 Forum and a national political adviser, told ChinaPerspectives that promoting a healthy recovery of the capital market requires both improving economic fundamentals and interest rates that are "low enough".

Zhang, who is also deputy director of the Chinese Academy of Social Sciences' Institute of World Economics and Politics, said there remains a large scope for interest rates to decline, as the rate cut should be significantly bigger than the slide in price levels to ease real financing costs and spur private investment and consumption.

Dong Yilang contributed to this story.