Recently, the the Political Bureau of the Communist Party of China (CPC) Central Committee meeting called for strengthening macro-policy adjustment, firmly stabilizing the economy, striving to achieve the expected goals of economic and social development throughout the year, and keeping the economy running in a reasonable range. When it comes to monetary policy, it emphasizes "making good use of all kinds of monetary policy tools".
At present, it is particularly important to make good use of various monetary policy tools and increase support for the real economy. Since the beginning of this year, China’s economic operation has generally achieved a smooth start. However, the COVID-19 epidemic and the Ukrainian crisis have led to an increase in risk challenges. The complexity, severity and uncertainty of China’s economic development environment have risen, and steady growth, stable employment and stable prices are facing new challenges. Faced with such a situation at home and abroad, we should not only strengthen our confidence, but also attach great importance to it and respond positively. Monetary policy should further increase support for the real economy, especially industries, small and medium-sized enterprises and individual industrial and commercial households seriously affected by the epidemic, make reasonable profits to the real economy, reduce comprehensive financing costs, stimulate market vitality, and help stabilize the macro-economic market.
To this end, we should speed up the implementation of the established policies. Recently, the financial management department has made a quick move, and measures such as "Financial Article 23" and RRR reduction have been introduced one after another, including total financial support, policy arrangements for key areas and weak links, and relief measures for "pain points" of industry enterprises under the current epidemic. The policies were introduced quickly and vigorously. Next, it is necessary for the financial system to reach a consensus, all localities to step up refinement, and financial institutions to actively use and make full use of various policies. Qi Xin will work together to implement the policies quickly.
Politburo meeting of the Chinese Communist Party demanded that we should pay close attention to planning incremental policy tools. At present, China has ample room for monetary policy, a rich "basket" of incremental macro-policy tools, and is confident and capable of supporting the macro-economy to continue to operate in a reasonable range. Recently, after 530 billion yuan of low-cost funds released by the RRR cut landed, the People’s Bank of China created a re-loan for scientific and technological innovation, and this 200 billion yuan re-loan amount will support the innovation and development of enterprises. Next, monetary policy should give full play to the dual functions of aggregate and structure of policy tools. On the premise of ensuring a reasonable growth of aggregate, we should continue to innovate monetary policy tools, implement structural monetary policies, enhance the accuracy and directness of policies, improve the efficiency of capital use, and let more credit resources flow to key areas and weak links with more needs.
What needs to be seen is that the current cyclical factors and structural factors are superimposed, and short-term problems and long-term problems are intertwined, which puts forward higher requirements for the formulation and implementation of macro policies. Policies must be forward-looking, laid out in advance, and adjusted in a timely manner. As far as monetary policy is concerned, China’s monetary policy will adhere to the principle of focusing on ourselves, but it is still necessary to pay close attention to the changes in price trends and maintain overall price stability; It is still necessary to pay close attention to the adjustment of monetary policy in major developed economies, taking into account internal and external balance. As Politburo meeting of the Chinese Communist Party demanded, we should grasp the advance and redundancy of the goal-oriented policy. This requires monetary policy to grasp the rhythm and strength and strike a good balance between steady growth, risk prevention and reform promotion.
Since the beginning of this year, monetary policy has made great efforts, and financial support for the real economy has not diminished. Next, with the implementation of more incremental policies, it will help more enterprises to solve problems and provide strong support for stabilizing the macro-economic market and keeping the economy running in a reasonable range. (This article Source: Economic Daily Author: Jin Guanping)