"Double drop" news opinion on the Central Bank of "water", "QE" speculation. On October 26, the Central Bank published on its official website on "double flat" for the further answering reporters ' questions, "double down" and foreign Central Bank's quantitative easing (QE), a distinction is made.
Central Bank's explanation makes sense. Terminology confusion and even simple analogy does not contribute to people's understanding of monetary policy, as well as the anticipation of future monetary policy. The discussion on monetary policy should be based on the fundamentals of the Chinese economy. This year, the downward pressure on the Chinese economy really fully emerged.
The first three quarters of this year, China's GDP grew 6.9%, last quarter GDP fell below 7% in the first quarter of 2009. At that time due to the global financial crisis, the quarterly GDP growth rates in the next six months fell from around 10% to 6.2% all of a sudden, there has been a migrant tide. Later, in "4 trillion" investment policy stimulus, GDP growth in the first quarter of 2010 to return to 12.2% levels.
Rebound from the first quarter of 2010 the highest point so far, GDP growth has once again returned to 7%, compared with collapse of late 2008 and early 2009 fall, this process is a slow GDP growth down, so far, no mass laborer unemployment situation.
The problem is that regardless of the speed of the decline in GDP growth when the economy into a downward cycle, monetary policy must respond. As some prior to the opinion on the "4 trillion" investment policies differ, so that people are sensitive to Central Bank easing. Some easing of economic regulation needs, is also considered not reasonable "water".
In fact, monetary policy is less this year, but we see price data has been low. In January-September, CPI rose 1.4%, GDP deflator for -0.3%,PPI is maintained for 43 consecutive months below 0. Prices have not warmed because of the easing of monetary policy, reflected the complexity of the issues.
From the troika investment, exports and consumption, China's economy faced downward pressure is evident.
From the perspective of investment in January-September of this year, total investment in fixed assets grew by 10.3%, January-December last year grew 15.7%. In January-September of this year investment in real estate development rose 2.6%, January-December last year grew 10.5%.
From the perspective of foreign trade in January-September of this year, total import and export volume, exports and imports per cent growth respectively of-8.1%,-1.9%,-15.3%, and compared with data for January-December of last year, respectively, and 3.4%, and 0.4%.
From the perspective of consumption in January-September of this year, total retail sales of social consumer rose 10.5%, January-December last year grew by 12%.
When we see that when the gradual decline of the yields on financial products, return on investment in the real economy is declining. So, lower lending and deposit rates are consistent with the market direction.
The "double down" at the same time, the Central Bank announced that he would not set up limits for deposit rates, means that the interest rate deregulation era has ended, market interest rates would in future play a leading role in the Central Bank's monetary policy framework. Deposit reserve rate kept falling, and foreign exchange reduced. In the past few years, foreign exchange became in fact a currency mechanism, resulting in excessive liquidity, by raising the deposit reserve rate to be frozen. Now, foreign exchange reduced, cut the reserve requirement ratio before it can be considered as frequent RRR "inverse operation", therefore, reserve requirement ratio will return to a normal level.
In the course of this economic downturn, people's Bank of China, decisively advance the reform of marketization of interest rate and exchange rate, but also in advancing the transformation of China's monetary policy framework. Over China's currency policy is often due to its "heavy quantities, price of light" (that is, greater use of reserve requirements, little-used rate) was criticized, but in reality, shifting from quantity type to price direction of Central Bank efforts. As the Central Bank in "double flat" at the same time, continue to advance the reform of marketization of interest rate and exchange rate, the new monetary policy framework will be more market-oriented. One day in the eyes of the Chinese health care
No comments:
Post a Comment