Monetary Policy Brewed "Moderately Loose" To "Steady"

The key to this change is the moderation of monetary policy from "moderately loose" to "moderate", which means that the keynote of "tight money and broad finance" may be the main keynote of macroeconomic policy in 2011.

According to convention, the central economic work conference is held annually in December.

According to the first financial daily, the relevant departments have conducted research and Discussion on the topics of the central economic work conference, and will re evaluate the "positive fiscal policy and moderately loose monetary policy".

Two people who participated in the policy consultation told our correspondent that this policy combination is likely to be adjusted to a "positive fiscal policy and a prudent monetary policy" in 2011.

This adjustment means

"Developed by the United States as the representative of the"

2011: economic growth is stable and inflation is rising.

At present, the market generally forecasts that China's GDP growth rate is expected to be over 10% in 2010. Due to the base of last year, the CPI market is expected to hit a new high in October this year, but there will be a callback in November and December, a little more than 3% in the whole year.

"But the key is the forecast for 2011. At present, our prediction is that the GDP growth rate will come down next year, and we will be confident about 9.3%. But next year, CPI will be over 3% all year round. Some will even see 4%, and we expect it to be around 3.5%.

Next year, the whole situation will be a steady economic growth and rising prices.

The policy consultant pointed out to our reporter.

In fact, due to the lower economic recovery in Europe and the United States, the external environment of China's economy will not be good next year. The role of exports in promoting China's economy in 2011 has been significantly lower.

But the second round of quantitative easing pushed by the Fed will push up global commodity prices and pmit them to China.

Inflation in China will be a combination of "cost push" and excess liquidity.

Recently, represented by Wu Xiaoling, former deputy governor of the Central Bank of China, President of the macroeconomic Commission of the NDRC, Professor Li Yining of Peking University and Professor Zhang Shuguang from the Institute of economic research, the economist has suggested that China can tolerate a higher inflation level, such as raising the CPI target of 3% to 4% or even 5%.

The foregoing sources said that they had noticed recent discussions among experts and scholars, but the inflation expectations of the people were a big problem, and the policy might not be a clear-cut way to raise inflation targets.

But 3% is only the target of regulation and control, and the target of 2008 is 3%, but CPI has reached 4.8% in the whole year.

From "double loose" to "loose and tight"

After the outbreak of the international financial crisis in 2008, the Federal Reserve and the Central Bank of the world were in unison and jointly launched a loose monetary policy with low interest rates and quantitative expansion.

China did better in creating money and creating credit, and accumulated 10 trillion yuan of credit from the end of 2008 to 2009.

The Federal Reserve is about to launch the second round of quantitative easing this week, but it is time to shift.

In the economic situation, a significant difference between China and the western developed countries is the employment situation.

At present, the United States and Europe are worried about their high unemployment rate, and China has completed the 2010 annual employment target in the third quarter, and has achieved more than 9 million new jobs. It is possible to reach 11 million people throughout the year, and the employment situation is very good.

The unemployment rate of urban survey conducted by the National Bureau of statistics has also dropped significantly from the most severe crisis.

"The background of this employment situation determines that China can adopt a tightening policy which is more in line with policy needs, and we need not worry about the unemployment rate.

There is also a different deflationary pressure faced by the United States, Europe and Japan, and China has a higher upward pressure on prices, which determines that China's choice in macro policy orientation and macro policy exit strategy should be different from that in developed countries.

The official pointed out that the financial pressure of the developed countries is very large. They are the first to retreat from the finance and to withdraw money. Is China supposed to reverse and withdraw money first?

An economist who recently participated in the policy consultation told the newspaper: "when we met, we did discuss the issue. How can we cope with such a loosening outside? Is it lax or tight? If it is relaxed, it will cause greater inflation pressure and greater asset price bubbles; but if it is tight, the pressure of exchange rate appreciation will be great."

He pointed out that although the participants also had different opinions at that time, more people believed that China should now seek a prudent monetary policy rather than the same loose monetary policy as last year.

In general, monetary policy should return to a neutral and tight position. If we want to maintain a certain scale of investment and construction next year, fiscal policy should maintain a relaxed tone.

Total monetary, credit, interest rate and exchange rate tightening in 2011

Monetary policy returns from moderate easing to stability. What are the policy implications?

The policy consultant pointed out to the newspaper reporters that the qualitative implication of the quantitative implication implies that the monetary growth target may be lowered in 2011, the credit control target of the whole year will also be lowered, or the upper limit of the credit control will no longer be required.

In 2010, the M2 growth rate set by the central bank was 17%, but the M2 growth rate reached 19% at the end of 9.

On the credit target, the 7 trillion and 500 billion yuan credit target set at the beginning of the year is also likely to be broken, and has reached 6 trillion and 300 billion yuan by the end of 9, and this goal is only the target of credit scale within the table.

"My feeling is that in 2011, the M2 target may be reduced to 16%, or 15%."

This person pointed out that the scale of credit is also not suitable for administrative management too much.

In addition, interest rate and exchange rate policies are also within the framework.

The aforementioned economists pointed out that the combination of price policy and quantitative policy is the hot money issue widely discussed in the market, that is, raising interest rate or revaluation will attract hot money and enlarge the total liquidity.

"But we have repeatedly observed that hot money entering China is definitely not about the renminbi dollar spreads, but rather the growth of China's economy and the bubble of China's asset market.

If interest rates are raised, asset prices will not rise sharply, but hot money will not flow in. "

In terms of exchange rate policy, although the way of gradual appreciation is not optimal for many people, it is still more acceptable to all parties.