The 108-basis-point rate cut by the People's Bank of China last week tells us Beijing is now serious about boosting the economy. And with the one-year lending rate still standing at 5.58%, the good news is that China has scope for further easing.
But at the same time, the glass-half-empty interpretation is that China now recognizes its economy is in freefall as the global slowdown triggers a domino-like collapse in private business.
Last week, China's top planner Zhang Ping said the government has been forced to act to stave off massive unemployment and social unrest. The data coming out for November are expected to show an accelerated slowdown. One economist predicted that 1 in 5 migrant workers could lose their jobs.
As China's quasi-market economy faces potentially the worst decline in two decades, the capacity of business to cope with a cyclical downturn is being brought sharply into focus.
Going missing increasingly appears the favorite exit strategy for private business chiefs after a wave of closures.
The "Vanishing Business Owners" phenomenon made headlines last week when Hong Kong-listed Gome Electrical Appliances (HK:493: news, chart, profile) was unable to confirm the whereabouts of its founder and Chairman Wong Kwong-yu for nine days. Shareholders finally learned Friday that the billionaire tycoon had not fled China but has been answering questions with the Beijing police.
Leaving aside the issue of whether Wong has something to answer for, the case highlights the uncertainty facing business owners (and investors) when things go wrong in China.
Across China, thousands of business owners have literally disappeared overnight, leaving behind ghost-like factories and legions of unemployed migrant workers. This chaotic unraveling looks to be more than just a reaction to a down cycle.
One entrepreneur explained to me last week that many normally law-abiding business owners conclude their only option is to take flight rather than take their chances with China's opaque and uncertain legal system and the potentially large costs involved contemplating bankruptcy.
In Guangdong this year, the introduction of new rules on employment protection, medical benefits and wage rates have certainly made any restructuring more costly. Hong Kong factory owners will feel the brunt as the biggest investors in Guangdong.
Additional problems according to anecdotal reports are that authorities often respond to signs a business is in trouble with an aggressive tax collection policy, adding further strain to businesses.
Last week it was announced the two provinces of Shandong and Hubei banned companies from firing staff without government permission. In theory, that would make sacking staff a criminal offense.
There has always been this conflict with the risk-taking nature of capitalism and the command-and-control tendencies of the mainland Chinese government.
Addressing some of the concerns that are forcing business owners to up stakes looks to be a growing challenge for policymakers. The government in Beijing will also be aware that much of its legitimacy rests on a promise to deliver economic growth and jobs.
Various China skeptics have long argued that China lacks the institutions to make its market economy and self-styled brand of capitalism work successfully in the long term.
Will Hutton, for instance, in his 'Writing on the Wall" novel says that despite China's impressive economic achievements, its Achilles heel is the lack of institutions necessary for sustainable progress, such as rule of law, an independent judiciary and an idea that government needs to be accountable.
While these weaknesses can be papered over in good times, they are more likely to be exposed at a time of crisis, when the fault lines appear.
The naturally cyclical nature of capitalism needs a reliable framework that that keeps uncertainty and risk to a minimum, in order to work through the bust as well as the boom.
While the fiscal and monetary stimuli introduced by Beijing will undoubtedly help to keep the economy moving, something more will be needed to deal with these structural frailties. Otherwise, the downturn risks being more painful than many currently expect, as more business owners decide to take their money and run.