How Much Free Room For Local Debt?

From the results of the issuance of bonds in Jiangsu Province, the main investors in local debt are banks. China Merchants Securities believes that commercial banks' active participation in local debt is a far fetched mismatch. If it is considered from the perspective of bank assets and liabilities structure and assets income, it is obviously not a reasonable market allocation behavior.

"If local debt is to continue to be issued, it will require monetary policy coordination, such as interest rate cuts and RRR, which can reduce the risk of two high risks and the cost of financing." Li Jingzu, executive manager of Huambo brothers Asset Management Co, said.

Of course, the adjustment of monetary policy will ultimately depend on economic fundamentals and inflation. As a leading indicator of PMI, April was 50.1%, unchanged from March, and two months higher than the critical point. In April, CPI rose 1.5%, PPI fell 4.6% compared with the same period last year, and the economy and inflation will remain at a low level.

Guo Tianyong said that there will be more relaxed expectations, but on the whole is still sound, the central bank will adjust flexibly according to the economic changes, and there will be room for reduction in deposit rate and interest rate. The executive director of Minsheng Securities Research Institute, Mr Guan Qing you, expects that the central bank will also have big moves to cut interest rates or refinance in the two quarter.

"Monetary policy is actually tightening, and the deposit reserve rate is still over 18%. It is appropriate to relax, but it has not yet been relaxed. Even if the loan to deposit ratio is abolished, banks will not be able to do so without money. The cost of money supply should be reduced by increasing the supply of money." Zhang Hanya said.

Zhang Hanya research found that not all enterprises benefit from the interest rate cut now. The interest rate reduction is mainly based on the interests of large bank customers represented by state-owned enterprises, and small and medium-sized enterprises and private enterprises have not benefited from it. He believes that the future monetary policy The direction of adjustment is mainly to reduce the RRR. The deposit reserve ratio should be reduced to 17% or even lower.

Whether it will be in the near future Drop accuracy Zhang Hanya said that this is mainly based on the fundamentals of the economy. In the near future, we should focus on whether the economic data in May have improved.

A member of the Finance Department of a northeastern province told our reporter that whether it was issuing bonds or borrowing money from banks, it was necessary to repay them at the end. To solve the problem of insufficient local financial funds, there was still a need to increase local incomes. However, the current real estate recession directly affected the land finance of the largest area of land revenue.

Ministry of finance data show that in the first 4 months of this year, the general public budget revenue at local level was 28154 billion yuan, an increase of 7.7%; and in the first 4 months of the year, it was generally Public budget Expenditure of 38202 billion yuan, an increase of 13.9%.

"At the end of 4, the Political Bureau meeting put forward the key role of giving play to investment. The central government once again offered the investment banner. But for a time, large-scale investment in 2009 led to low efficiency of government investment, and many projects were not as good as banks or even for years in terms of yield. What's more, local governments are unable to make ends meet." An expert from the Academy of Social Sciences said.

The above financial departments suggest that we should readjust the proportion of tax distribution between the central and local governments, increase local revenue, reduce transfer payments and raise the efficiency of capital use.

"Local governments should speed up transformation and upgrading, find new growth points in the service sector and enrich their revenues. At the same time, negative listing policies should be implemented. They should be allowed to enter social capital completely. They should not only invest in infrastructure, but also introduce private capital in the input of basic elements, and implement the PPP mode of public-private partnership." Xiao Yimin said.