(Economic Observation) Looking forward to 2022: How can monetary policy be exerted when the word "stable" is at the forefront?
China News Service, Beijing, January 3 (Reporter Xia Bin) In 2022, China's economic work will be "stable", and the prudent monetary policy will continue to be implemented.
In a recent interview with the media, Yi Gang, the governor of the People's Bank of China, talked about the relevant tasks of the central bank this year, and also put the word "stable" on his lips.
Data map: Beijing, pedestrians passing by the People's Bank of China.
Photo by China News Agency reporter Zhang Xinglong
Why emphasize on "stability"?
Yi Gang bluntly stated that the reason why the monetary policy of 2022 emphasizes "stability" is based on the current domestic and foreign situations.
He said that from a domestic perspective, China's economic resilience is strong, and the fundamentals of long-term improvement will not change. However, under the triple impact of demand contraction, supply shocks, and weakening expectations, it is facing downward pressure in the short term, and the macroeconomic market must be stabilized.
From an international perspective, under the impact of the epidemic in the century, the external environment has become more complex, severe and uncertain, and the difficulty of maintaining internal and external balance has further increased. This also requires a stable economic and policy environment to deal with various external uncertainties.
It is precisely because of the need to hedge and eliminate instability factors that China needs to respond with "stability".
Zhang Ming, deputy director of the Institute of Finance of the Chinese Academy of Social Sciences and deputy director of the National Finance and Development Laboratory, pointed out that one of the positive factors conducive to China’s “stability” Monetary policy has ample room for improvement.
Maintaining continuous, effective, and reasonable cohesion of policies is an important manifestation of "stability."
In the beginning of 2022, the People's Bank of China will achieve policy stability.
In response to the impact of the epidemic, the central bank will create two monetary policy tools that directly reach the real economy in 2020 to support financial institutions in deferring the repayment of principal and interest on loans to small and micro enterprises that are experiencing temporary difficulties, and encourage financial institutions to increase credit loans to small and micro enterprises Intensity.
The two direct tools have effectively alleviated the pressure on small and micro enterprises to repay the principal and interest and alleviate the lack of mortgage and financing difficulties for small and micro enterprises.
In order to maintain and consolidate support for market entities, and continue to do a good job of financial support to protect market entities in a more sustainable way, the Central Bank has decided to implement inclusive small and micro enterprise loan extension support tools and inclusive small businesses starting from January 1, 2022. The two direct tools of the Micro Enterprise Credit Loan Support Program continued to be converted.
Lian Ping, chief economist and dean of the research institute of Zhixin Investment, said that in 2022, the targeted support function of structural monetary policy will be further actively used.
The Central Economic Work Conference emphasized that “the extension should be postponed, and the extension should be expanded.” In 2022, it will continue to implement relevant support tools for inclusive small and micro enterprises, and use policy tools such as supporting agriculture, supporting small and medium-sized enterprises, and rediscounting. , Intensify support for weak links, key areas, and key regions such as agriculture, rural areas, small and micro enterprises, private enterprises, advanced manufacturing, and provinces with slow credit growth.
Sun Guofeng, Director of the Monetary Policy Department of the Central Bank of China, stated that the central bank will grasp the three “stabilizations” in 2022 to further enhance the ability of financial services to serve the real economy.
First, the total amount of money and credit has grown steadily.
Comprehensive use of multiple monetary policy tools to maintain the growth rate of money supply and the scale of social financing basically match the growth rate of the nominal economy.
Second, the financial structure has been steadily optimized.
We will give full play to the dual functions of monetary policy tools in terms of aggregate and structure, and make precise efforts to guide financial institutions to increase support for the real economy, especially small and micro enterprises, technological innovation, and green development, and support high-quality economic development.
Third, the overall financing cost has been steadily decreasing.
Improve the market-based interest rate formation and transmission mechanism, give full play to the effectiveness of the reform of the loan market quoted interest rate, and promote the steady decline of the overall financing cost of enterprises.
Lian Ping suggested that this year's prudent monetary policy should moderately increase counter-cyclical adjustments and promote credit expansion through multiple channels.
Actively innovate the structural application of re-lending and rediscount tools, and leverage their advantages in terms of total volume, price, and structure to support stable economic growth and high-quality development.
Cheng Shi, chief economist of ICBC International, stated that China's monetary policy will remain stable and flexible within the normal range to ensure the stability and long-term development of the real economy.
The flexible monetary policy will be "self-centered, stable and stable", maintain "appropriate tightness", keep the benchmark interest rate and the total liquidity gate not loose, prevent inflationary pressure from continuing to strengthen itself, and the RRR cut policy and inclusive financial policy are not tight , Continue to provide effective blood transfusions for small, medium and micro enterprises that are greatly affected by the supply shock.
He also specifically mentioned that China will pay more attention to the impact of macro policies on economic operations under a cross-cyclical framework.
Traditional counter-cyclical adjustment mainly focuses on smoothing out fluctuations in the output gap and inflation gap, so as to achieve short-term stability of economic operation. Inter-cyclical adjustment mainly considers releasing medium and long-term policy space and maintaining long-term economic stability. This means that under the framework of inter-cyclical policies, traditional The macro policy will not be too loose when it is loosened, and it will not be too tight when it is tightened.
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