China said on Thursday that the economy grew 11.5% year-to-year in the third quarter, slightly lower than the second quarter’s 11.9%. Inflation was up 6.2% from a year earlier, down from 6.5% in August.

The new figures have unleashed different reactions. Some predict the Central Bank will increase interest rate immediately, others are more optimistic that the economy is showing signs of a gradual slow down.

China has increased the key one-year bank-lending rate five times to 7.29% this year, aimed at slowing investment growth. Each time the stock market soared on the news. Whether the Central Bank decides to raise interest rate or not, one thing needs to be recognized: an interest rate increase in China is more symbolic than functional.

The two main drivers of China’s economy are investment and export. Once, foreign direct investment took a large percentage of China’s overall investment. Recently, property and infrastructure became more important than before. An interest rate hike is unlikely to impact these types of investments significantly. Moreover, the current asset boom is making the gradual interest rate increase negligible. The minimal effect of an interest rate hike on export is obvious. Factories continue to churn out goods just like before. Indeed, a higher interest rate affects both economic engines only marginally.

A higher interest rate has only nominal effect on China’s money supply. An interest rate adjustment, when working in a market economy, alters the aggregate money supply and therefore adjusts aggregate demand. But increasing interest rate in China has almost no impact on monetary supply, which is strictly controlled by the Central Bank through other monetary schemes such as sterilization bills (the bills dry out extra RMB).

Increasing interest rate also does little to China’s inflation when the government imposes direct price control on core consuming goods, such as gasoline, medicines, rice and cotton. The government released live pigs from its pig reserve this summer when pork prices soared and threatened to speed up inflation. This episode showed that the government is ready to take contingency measure to intervene prices, minimizing interest rate adjustment effect.

At the same time, it is difficult to find evidence that higher interest rate is discouraging borrowing and lending. Chinese Banks are posting huge earnings and almost every industry is experiencing historical growth. All seems to suggest that higher interest rate should not function as it is supposed to.

While people wait for the Fed’s decision on whether to lower interest rate at the end of the month, it is important to recognize the vastly different context when interpreting China’s interest rate hike. Though both countries turned to interest rate for economic fine-tuning, the implication of their policies will not be the same.