China News Service, August 12 (Zhongxin Finance and Economics Gong Hongyu) On the 10th, the central bank released the implementation report of China's monetary policy in the second quarter of 2022, and made arrangements for the main operational ideas such as monetary policy and real estate financial policy in the next stage, and passed on it. A series of new signals.

Stabilizing prices is the central bank's primary goal

  In July, the year-on-year growth rate of China's CPI hit a new high since August 2020. In the latest report, the central bank has increased its attention to inflation, not only saying that "the current high inflation is becoming the biggest challenge to global economic development" when looking forward to the world economy, It also explained the current inflation situation in China in the form of a column. In the view of the central bank, prices can still achieve the expected target this year, but they should be alert to structural inflationary pressures.

  Wen Bin, chief economist of China Minsheng Bank, pointed out to's "China New Observation" column that changes in domestic and foreign inflation have become the most concerned content in the second quarter monetary policy implementation report, and the next step will be determined under the primary goal of maintaining currency stability. The main tone of monetary policy.

  Wen Bin believes that based on the assessment of the inflation situation in the second half of the year, the monetary policy in the next stage will also adhere to a stable orientation, insist on not engaging in "flooding", not over-issuing currency, and taking into account stable growth, employment, and prices. balance.

  At the same time, it is necessary to continuously consolidate the favorable conditions for the stable and increased domestic grain production and the stable operation of the energy market, and make appropriate responses.

To this end, the meeting held by the Political Bureau of the Central Committee of the Communist Party of China on July 28 also proposed to strengthen food security, improve energy and resource supply guarantee capabilities, and increase efforts to plan and build a new energy supply and consumption system.

Data map: People's Bank of China.

Photo by China News Agency reporter Zhang Xinglong

Increase inclusive support for small and micro enterprises to stabilize employment

  In Wen Bin's view, the central bank is marginally optimistic and generally cautious in its assessment of the domestic economy. The second quarter monetary policy implementation report no longer emphasizes the "triple pressure", indicating that the economic trend is improving. The current lack of effective domestic demand has become an important constraint to stabilizing the economy. In "the recovery of domestic consumption is faced with challenges such as sluggish household income, damage to the balance sheet and limited consumption scenarios, there are still some difficulties and obstacles in actively expanding effective investment. In an environment where the foundation for industry recovery is not yet solid, and young people are under great employment pressure, arduous efforts are still needed to stabilize the economy.

  He believes that the foundation of domestic economic recovery still needs to be solid, the willingness of enterprises and residents to increase leverage is still not strong, and the youth unemployment rate is high. Benefit small and micro loans to support the stable employment of small, medium and micro enterprises.

The connotation of prudent monetary policy has changed

  Wen Bin explained that, in the next stage, the general tone of monetary policy of "steady words and seeking progress while maintaining stability" will remain unchanged, but under the pressure of structural inflation, the connotation may change.

  The second quarter monetary policy implementation report put forward that "taking into account the short-term and long-term, economic growth and price stability, internal balance and external balance, insist on not engaging in 'flooding', not over-issuing currency, and providing more powerful and higher-quality resources for the real economy. At the same time, in setting the tone, more emphasis is placed on "implementing policy measures well", which means that monetary policy has completed the mission of "strengthening ahead" in stages, with increasing internal and external constraints, not excessively pursuing economic growth, Under the environment of promoting high-quality economic development, it is not necessary for aggregate monetary policy tools to continue to exert force, and the probability of another RRR cut or policy interest rate cut in the short term is small.

  On the premise of "not over-issuing currency" and maintaining a reasonable and sufficient liquidity, the follow-up will focus on the implementation of a package of policy measures to stabilize the economy, make good use of policy-based development financial tools, make efforts to support the construction of infrastructure, and maintain currency The supply and social financing scale should increase reasonably, and strive to achieve the best results in economic operation.

The development of various structural re-lending instruments and development and policy financial instruments will become an important support for credit in the second half of the year.

Shaoxing Residence Photo by Xiang Jing

Adhere to "housing and not speculating", and make full use of the policy toolbox by implementing policies based on the city

  Regarding the real estate issues that the market is concerned about, the second quarter monetary policy implementation report emphasizes "housing, not speculating," and "doing not use real estate as a short-term means of stimulating the economy"; for the current plight of real estate, it emphasizes "applying policies based on cities and making good use of policies." Toolbox” to promote the healthy development and virtuous circle of the real estate market.

  Wen Bin pointed out that under a series of measures to stabilize the real estate market in the early stage, the real estate market has recovered marginally, but the "stop supply and loan" incident of individual real estate in July caused residents to lack confidence in buying houses, real estate sales weakened again, and the signs of residents' shrinking balance continued.

At the same time, under the combined influence of factors such as increasing demand for risk prevention, high savings rates, inversion of mortgage and commercial loan interest rates, and widening gaps in asset yield and liability cost ratios, the mortgage prepayment rate has increased, and the financing stability of the real estate chain has increased. weakened, the foundation of credit liberalization is still not solid.

  In order to achieve the state of "three stability" (stabilizing land prices, stabilizing housing prices, and stabilizing expectations), there is a possibility of continued relaxation on the demand side in the future. It is expected that local governments will continue to introduce various measures to stabilize real estate according to the actual situation, including but not limited to some cities. The relaxation of the "four restrictions", the adjustment of the principle of "recognizing housing and recognizing loans" to support improving demand, and further reduction of mortgage interest rates, etc., will boost confidence and activate the market.