In Wuxi, Jiangsu province, a combination of factors such as the bankruptcy of what was the world's largest solar panel company Suntech Power Holdings Co Ltd, which was hugely exposed to local bank loans, weakened bank confidence.

In Wenzhou, Zhejiang province, defaults, bankruptcies and foreclosures are as common as slides in property prices. It is the only major city that witnessed a burst bubble-like reduction in its property market.

In these places the situation is somewhat like what it was in the days after the first round of the QE was launched: The markets were not necessarily short of money, but confidence had been weakened.

But on the national level, money shortage is a myth. Considering China's lending growth rate, high saving ratio and huge turnovers in the stock market, the country has never been short of money in absolute terms.

The recent interbank rate hike was more a seasonal thing. As Chinese banks often recall money at the end of each quarter to polish up their balance sheets, the money markets are subject to seasonal fluctuations, which usually occur at the turn of the year, in June and in October. Interbank rates in December are usually 100 basis points higher than those in November. So the recent Shibo rate hike is not a surprise and the margin dose not run beyond the normal range.

In this sense, it is too early to say China is experiencing an unusual money shortage, or to request the central bank to readjust its monetary stance.

The real problem of China's money market lies in its imbalanced structure, which hinders the country's relatively ample liquidity from flowing freely and efficiently.

About 60 percent, of China's loans are estimated to go to land and property markets directly or indirectly. The over-reliance created a situation in which the property market "hijacked" the money market.

With money parked in this single sector, real-economy industries have limited access to funds.

In addition, as property development requires time, the turnover rate of money is low and could result in a structural liquidity squeeze. This means that although the markets overall see a huge sum of money, it flows too slowly. When the market needs the money, the property market has absorbed too much funding and refuses to release more, hence causing a sharp increase in overall borrowing costs.

Indeed, the US tapering of the QE program offers a chance for China to kick this property-market addiction.

On one hand, as international speculative funds, a big slice of which are parked in China's property market, leaves China for the US, it is expected that the property price growth rate will slow down, forcing more capital to leave that industry.

On the other hand, the US pulling back from QE is a strong indication that its economic recovery will be solid, which will boost US demand for Chinese goods. This can be seen in an 11 percent jump in Chinese exports to the US in November. Continued US recovery may speed up the recovery in Chinese manufacturing and trade sectors, helping China shed overcapacity and lure capital back to real-economy sectors from the property market.

Now what China needs to do is to make the money market stable amid the US move, help channel the capital to where it is really needed and prevent the manufacturing sector from repeating the old growth model of simply building on cheap costs.

The authors are financial analysts in Shanghai.

The views do not necessarily reflect those of China Daily.