Increase monetary policy support for the real economy


　　 Jin Guanping

　　The executive meeting of the State Council held recently made it clear that the support of the prudent monetary policy to the real economy will be increased, various monetary policy tools will be used in a timely manner, the liquidity will be kept reasonably sufficient, and the credit and social financing will continue to grow moderately.

　　The economic development in the first quarter is crucial to the economic trend of the whole year.

At present, my country's external environment has become more complex, severe and uncertain, and economic development is facing triple pressures of shrinking demand, supply shocks, and weakening expectations.

This year's "Government Work Report" put forward the target of GDP growth of about 5.5%, which needs to be proactively responded to by macro policies and put forward efforts.

The previous meeting of the State Council's Finance Committee emphasized that to effectively boost the economy in the first quarter, monetary policy should take the initiative to respond, and new loans should maintain moderate growth.

　　Since the end of last year, according to the central government's deployment, the monetary policy has taken the initiative to push forward to stabilize growth, and the results have gradually emerged.

Through two comprehensive RRR cuts, lowering the reverse repurchase, medium-term lending facility (MLF), and re-lending interest rates to support agriculture and small businesses, and guide the loan market quotation rate (LPR) to be lowered twice, etc., the financing costs of enterprises have been guided downward.

Last year, the weighted average interest rate for corporate loans hit the lowest level in more than 40 years of reform and opening up.

In the first two months of this year, new loans increased significantly compared with the same period last year.

The "increase in volume and decrease in price" of corporate loans has played a positive role in the stabilization and recovery of the economy, and has strongly supported my country's economic recovery to maintain a positive momentum.

　　At present, a prudent monetary policy should further increase support for the real economy, and the focus is to give full play to the dual functions of monetary policy tools in terms of total volume and structure.

From an aggregate point of view, to maintain moderate growth of credit and social financing, the growth rate of aggregate indicators such as credit, social financing scale and broad money (M2) must match the growth rate of nominal GDP; from a structural point of view, it is necessary to continue to guide financial Live water flows to key areas and weak links such as small and micro enterprises, technological innovation, and green development.

　　What needs to be emphasized is that my country's monetary policy will maintain a stable tone. It will not engage in "flooding", but also meet the reasonable and effective financing needs of the real economy. It will pay close attention to the impact of the accelerated monetary policy shift of major developed economies on my country. To "maintain me", maintain a prudent monetary policy that is flexible and appropriate, and that liquidity is reasonably sufficient.

Overall, the recent Fed rate hike has limited impact on my country.

However, it should also be noted that since the outbreak of COVID-19, global asset prices have risen rapidly, the debt burden of market entities has increased, and financial vulnerabilities have increased.

In this context, the monetary policy shift of developed economies may not only be associated with financial risks, but may also lead to resonance in emerging economies through channels such as trade exchanges, capital flows, and financial markets.

Therefore, in the near future, it is necessary to pay close attention to the marginal changes in the domestic and foreign economic and financial situation and take the initiative to respond.

　　Next, to increase the support of the prudent monetary policy to the real economy, it is necessary to face up to the impact of insufficient effective demand, rising costs and other factors on market players.

It is necessary to further strengthen policy guidance, boost the confidence of market players, increase effective credit demand, and stabilize and expand aggregate demand.

At the same time, improve structural monetary policy tools such as re-lending to support agriculture and small-scale enterprises, carbon emission reduction support tools, and special re-lending for clean and efficient use of coal, enhance the ability of financial services to serve the real economy, and achieve a better combination of "stable total volume and excellent structure" , focus on stabilizing the macroeconomic market, and create a suitable monetary and financial environment.

In the future, my country has the ability and conditions to deal with external shocks and domestic downward pressure, maintain stable economic operation and overall stable inflation, stabilize the macroeconomic market, and continue to be a bright spot in the global economy.

Jin Guanping

Jin Guanping