Shi Ping Big Finance Phoenix Satellite TV
Shi Qiping
Phoenix Satellite TV current affairs commentator
After the G20 Finance Ministers’ meeting, before the two sessions of the G20 Finance Ministers, the People’s Bank of China announced a reduction of RMB 700 million in the deposit reserve ratio, which is estimated to be released by 0.5%. Liquidity to meet the needs of stable growth.
Based solely on the current economic and financial situation in mainland China, the main backgrounds for the RRR cut again are: 1. The stock market continues to slump; 2. Various real economic indicators, including the newly announced manufacturing PMI index, have further declined, reflecting the continued deterioration of the operating environment; 3. The depreciation of the RMB exchange rate has been significantly reduced, giving greater room for the implementation of loose monetary policies. Can the implementation of the currency policy of
contribute to stable growth? Will there be a new wave of pressure on RMB depreciation, or another housing bubble in first- and second-tier cities? Leave it alone, let time be the answer. However, such a policy orientation has undoubtedly caused great confusion and even contradictory impact on the "supply-side structural reform" that the Chinese ruling authorities have repeatedly advocated in recent months.
has now become the main theme of China's policy circles "supply-side structural reform". It was proposed by China’s top leader Xi Jinping in November last year. It has not been half a year, but it has long become a catchy vocabulary for officials, scholars and experts at all levels. . Although so far, no precise and clear definition of this term has been seen by the decision-making authority or authority, but in general, it should be understood that the decision-making authority recognizes the previous approach, which is biased towards Keynesian theory at every turn. The policy of stimulating demand by expansionary means seems to be ineffective, and even has many sequelae. The reflection caused by it has decided to change course and begin to attach importance to supply-side reforms. The specific content may be more emphasis on market mechanism, more emphasis on efficiency, productivity and innovation, and it can also be determined that it is not compatible with stimulating demand; however, today’s RRR cut policy has clearly returned to the old demand-side policy of the past. This phenomenon fully reflects the current “dilemma” of the Chinese policy-making authorities. In addition to the "dilemma" of
, there are also "trilemmas". One of the main purposes of this RRR cut should be to relieve the shortage of market funds; one of the main reasons for the shortage of market funds is the outflow of a large amount of capital; the latter, to a large extent, is in line with the strong psychology of expected RMB depreciation related. In other words, the policy of RRR cut is closely linked with capital outflow, shortage of funds and the trend of the RMB exchange rate. Gore, after the RRR cut, means that the monetary policy is moving towards looseness, which has put further depreciation pressure on the RMB exchange rate, and in turn, will it create a greater thrust for capital outflow and shortage of funds. In other words, this is essentially tantamount to entering a policy "trilemma".
No matter the "dilemma" or "trilemma", it reflects the current dilemma faced by China's economic policies. In fact, from the perspective of "economic policy", predicament has always been the norm, and no single policy can achieve all goals at the same time. What the decision-making authority has to do is to make a tradeoff between different policy objectives. The current economic situation and troubles in China have clearly pushed the ruling authorities to the forefront of the policy trilemma. This is the main explanation for why they face dilemmas, lose sight of the other, and even contradict themselves from time to time. What should I do with
? The answer is to find the "trunk" of the policy, and then stick to it, and not waver, otherwise, two minds, wandering and repeated, will always face various policy dilemmas or predicaments, just like now.
If our observations are correct, then the main policy backbone of the current mainland ruling authorities should be the "supply-side structural reform" that has been repeatedly emphasized recently. However, "supply-side structural reform" is different from the "demand-side stimulus policy". , But the effect is slow; the latter stimulates demand and takes effect quickly, but with many side effects and sequelae. Choosing between "supply-side structural reforms" and "demand-side stimulus policies" and sticking to them is China's challenge and homework. Unlike China, most developed countries have matured and improved their economic systems, which means that there is not much room for reform. However, it has been less than 40 years since China has embarked on a market economy, and there are plenty of places to be reformed and improved in all systems, which means that mainland China can still have great reform dividends, but it is in power.The authorities must have full knowledge, confidence and persistence in this, and not be easily tempted by the stimulus policies of ordinary countries. What the Chinese decision-making authorities need is this kind of strategic determination.
Editor of this issue: Huang Chunyan and Li Nan (internship)
