How to understand the term 'supportive' in the new formulation of China's monetary policy?
2024-10-15
The latest financial data released by the People's Bank of China on the 14th showed a trend of stabilization and recovery. This is closely related to the gradual implementation of the central bank's incremental monetary policy. The Governor of the People's Bank of China, Pan Gongsheng, first proposed a "supportive monetary policy stance" at this year's Lujiazui Forum; At the second China Portuguese speaking Countries Central Banks and Financiers Conference held in September, Pan Gongsheng once again clarified that the People's Bank of China will continue to adhere to a supportive monetary policy stance. According to Pan Gongsheng's explanation, global inflation has fallen from high levels this year, but there is still strong stickiness. The central banks of major developed economies generally maintain a high interest rate and restrictive monetary policy stance. Relatively speaking, China's monetary policy stance is supportive, aimed at supporting sustained economic recovery and improvement. How should we understand "supportive" in the new formulation of China's monetary policy? Authoritative experts interpret that Pan Gongsheng's supportive monetary policy corresponds to restrictive monetary policies internationally, indicating that China's monetary policy is increasing its support for the real economy. This is not contradictory to the concept of a prudent monetary policy. "The expert mentioned above stated that it should be noted that in the context of slowing domestic demand growth, increasing countercyclical adjustments in monetary policy can truly reflect the" supportive "effect and promote stable economic operation; If the downward pressure on the economy eases, monetary policy will also return to normalcy. The phrase 'loose if appropriate, tight if appropriate' itself is also a manifestation of policy stability. Industry insiders pointed out that from this round of policy adjustments, two key points have been grasped: real estate and capital markets. The market generally believes that this round of real estate market adjustment has lasted longer than before, and market confidence remains weak, affecting economic operation. From this year's monetary policy operation, the central bank has focused on promoting consensus in all aspects, focusing on the key point of the real estate market. In May, it optimized the housing credit policy, established re loans for affordable housing, and promoted the destocking of existing commercial housing; In September, we will further reduce the interest rates of existing housing loans and the minimum down payment ratio for housing loans, and extend the implementation period of some real estate financial policies. The early policy effects have gradually emerged, and the real estate market has already responded positively. The stock market is a barometer of the macro economy and a concentrated expression of market confidence. Recently, the People's Bank of China has also created two structural tools to support the stable development of the stock market. Industry insiders say that after a series of policies were introduced, the stock index rebounded, effectively boosting market confidence. In addition, monetary policy also pays more attention to supporting the transformation and upgrading of the economic structure. With the high-quality development and structural transformation of the economy, the growth of monetary credit required by the real economy has changed. Monetary policy is more focused on key areas and weak links, increasing the activation of inefficient stock financial resources, focusing on the "five major articles" of finance, and continuously optimizing the credit structure. Industry insiders say that from the multiple public statements made by the central bank since the beginning of this year, the entire regulatory approach of monetary policy has adapted to changes in the situation. Pan Gongsheng has repeatedly stated that maintaining price stability and promoting a moderate price rebound are important considerations for grasping monetary policy, guiding financial institutions to scientifically assess risks, constraining financing supply to industries with overcapacity, and meeting reasonable consumer financing needs more targetedly; At the same time, we need to leverage policy synergy, deeply implement consumption driven strategies, and promote supply-demand matching. The above-mentioned individuals stated that overall, in the context of economic structural adjustment, transformation and upgrading, and accelerated conversion of old and new driving forces, in order to tap into effective domestic demand in the future, especially in promoting the expansion of consumer demand, monetary policy will also work together with other macro policies to strengthen support for the economy to achieve dynamic balance between supply and demand. (New Society)
Edit:Rina Responsible editor:Lily
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