Monetary Policy Has Not Been Leveraged. The Financial Leverage Ratio Has Passed The Warning Line.

In the Chr (34) annual meeting of the 50 Forum on China's economy, Chr (34), Wu Jinglian, a famous economist, cautionary: at present, China's financial leverage ratio has been rising. Last year, it has passed the warning line and is still improving. It is still in danger of systemic risk. We must accelerate the pformation of the mode of economic development. "(CHr)

According to Wu Jinglian analysis, China is now in a predicament, and there are two phenomena: first, diminishing returns on investment.

Over the years, the intensity of stimulus has not diminished every year, but efficiency has been declining, and it has little effect.

The second is the continuous improvement of leverage.

In November last year, the Central Committee of the Communist Party of China put forward efforts to promote structural reform of supply side and promote sustained and healthy economic development.

Chr (34), which is a very important decision, means that we are going to grow from the stimulus policy which was mainly based on Keynes doctrine to the macroeconomic policy of improving the quality of supply and improving the quality of development.

This is an important change in leadership decision-making.

Chr (34) Wu Jinglian said that western economists have repeatedly suggested that the stimulus policy of Keynes is very harmful to China's long-term development.

Is monetary policy steady or loose?

According to the data, the GDP growth rate last year was 6.9%, but the nominal growth rate was only 6.4%. Compared with that, the M2 growth rate was 13.3%, and Chr (34) was 7 percentage points higher than that of GDP.

In this case, monetary policy is actually loose.

Chr (34)

Chr (34) in January this year, loans increased by 2 trillion and 500 billion, an increase of more than 1 billion over the same period. At this rate, our monetary growth will continue to enlarge, not only without leverage, but also rapidly increasing leverage.

Chr (34) Wang Xiaolu worried that Chr (34) would be far from the financial crisis in the future? Chr (34)

Li Yang, director of the national finance and development laboratory, said at the meeting that deleveraging would be a very slow and tortuous process under the modern economic conditions, especially in the context of extensive financial liberalization.

The only way to reduce leverage is to maintain high and medium economic growth while controlling the growth rate of debt.

Li Yang believes that the core issue lies in the contradiction between deleveraging and maintaining proper growth rate.

It is not easy to maintain some balance between the two.

Under the background that the downward trend of economic growth has not been reversed, maintaining the appropriate growth rate will become the government's first choice.

Although deleveraging is related to the healthy development of the economy in the long run, it will be sacrificed in the short term.

The core of the task of setting up a deleveraging task in the process of crisis is to remind the whole society not to lose its way, not to rely too much on demand side regulation, and to supply a reasonable roadmap for deleveraging on the supply side.

In Wang Xiaolu's view, practice has proved to be loose.

It is ineffective to solve the economic weakness.

The main problem of economic weakness lies in the structure. If the structure is not adjusted, the problem of weak growth can be solved by loose monetary policy alone, which may bring significant risks.

Chr (34) economic shocks, because several factors on the supply side are weakening, demographic dividend disappears, investment increases unsustainable, and potential growth rate decreases.

Chr (34) Wu Jinglian said that the prescription to solve this shock is to mobilize the enthusiasm through correcting the misallocation of resources, changing the deterioration of structure and establishing compatible incentive mechanism, and doing everything possible to improve the allocation effect of resources and the operation effect of macroeconomy.

Chr (34) the so-called "resource allocation efficiency" and "economic efficiency" actually change the way of economic development.

Chr (34)

Chr (34), however, speed up.

The key to the success of pformation is whether we can eliminate institutional obstacles to achieve pformation through comprehensive deepening reform.

Chr (34) Wu Jinglian further stated that it has been 20 years since the pformation of the mode of economic development was achieved, but until now, the pformation has not yet been fully realized.

Why is Chr (34) making such a slow progress? The conclusion is that there are institutional obstacles.

And how to solve this problem, I think, is to deepen the reform in an all-round way, and make full use of the effective allocation of resources and effective incentive mechanism in the market to achieve pformation.

Chr (34)

Chr (34) is the best way for government agencies and officials to intervene with administrative means.

Chr (34) Wu Jinglian expressed concern about the possibility of the old side of the supply side reform.

It believes that the supply side reform should be institutional reform, and now it is often misunderstood as Chr (34) structural adjustment of supply side Chr (34). Chr (34) structural adjustment of the supply side has actually returned to the old way, that is, administrative power is used to adjust the structure.

I am very worried that this method may not be able to achieve our desired results Chr (34).