Macro Economy: Adhering To The Direction Of RMB Exchange Rate Marketization Reform

In 2017, the government's work report was unveiled. In 2017, the growth target of GDP was slightly reduced to about 6.5%.

This adjustment is concerned by many research institutions.

CICC said that this downward adjustment does not mean that the actual growth rate is bound to slow down.

Previously, CICC has raised its forecast for GDP growth in 2017 to 6.8%.

Goldman Sachs Gao Hua's research report read that "the growth target is being guided very slowly to a lower level."

CICC has just released its Research Report on the 2017 government work report, which mentioned that the GDP growth target should be reduced to about 6.5%, but it is expected to achieve higher growth throughout the year.

The above research report commented that "about 6.5%" was slightly lower than the target interval of 6.5%~7% in 2016. The government work report said that "better results are achieved in practical work". This statement also reflects that the government is confident that it will achieve more than 6.5% growth.

CICC said, GDP

The decline does not mean that the actual GDP growth rate will slow down in 2017, and the current economic growth momentum will stabilize and pick up and is expected to remain strong.

Goldman Sachs Gao Hua's two sessions analytical research report said, "this goal is in line with the general expectation, but the second half of the sentence" in the actual work to strive for better results "contains important new information.

We believe that this means that the target of 6.5% is slightly asymmetrical and different from last year's 6.5%~7% target range, which in fact indicates that a slight growth rate of less than 6.5% may be considered acceptable.

"This subtle change may show that the growth target is being guided very slowly to a lower level."

Goldman Sachs Gao Hua research paper said.

The growth goals mentioned in the government work report include: budget.

To maintain 3%, the generalized budget deficit rate has increased over last year; the expected growth target of M2 and social financing balance has been reduced to about 12%.

2017

To maintain a healthy neutral, the expected growth rate of M2 and social financing balance is 1 percentage points lower than that of 13% in 2016, which is generally stable compared with the actual growth rate at the end of last year.

"At present, the consumer price index (CPI) is in the golden section of 2%~3%, and the CPI growth rate will decline sharply in the short term, which is affected by the base factors. Therefore, the possibility of raising the benchmark interest rate for loans and deposits is unlikely."

CICC said, "however, the PPI and real estate prices are higher. Since the beginning of this year, domestic and foreign demand has maintained strong growth. We expect that monetary policy will gradually withdraw from the future."

In addition, in terms of exchange rate policy, Goldman's Gao Hua analysis said the government work report this year stressed that the government would "stick to the direction of the reform of the RMB exchange rate market", different from the wording of last year, and this year's statement on exchange rate policy seems to have reserved space for potential adjustment.

The Chinese government should not have growth targets and policies should not be abducted by growth targets.

Steady growth is better than steady employment.

As long as there is no big trouble in the job market, human intervention should be reduced, giving the market opportunities for clearing, allowing the economy to have self adjustment and self repair opportunities, and reduce the chance of big risks by releasing small risks.

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