(China in the past ten years) Chief Look at the Economy: China's monetary policy adheres to "me as the main", what message does it convey?

　　China News Agency, Beijing, September 13 (Reporter Xia Bin) Monetary policy, as an important part of a country's macro policy, is a "window" to observe a country's policy orientation.

In recent years, China's monetary policy has insisted on "taking me as the mainstay". What message has it conveyed?

　　"In the past ten years, the autonomy of my country's monetary policy has been significantly improved." Shen Minggao, global chief economist of GF Securities, pointed out in an exclusive interview with China News Agency recently. This is reflected in three aspects: First, adhere to the discipline of normalizing monetary policy, without Follow developed countries to adopt aggressive stimulus policies to avoid policy overdrafts; secondly, the marketization of monetary policy has been improved, including reducing quantitative interventions and improving the market pricing power of interest rates and exchange rates; thirdly, strengthening macro-prudential management to avoid major systemic sexual risk.

　　Shen Minggao believes that in the longer term, the autonomy of China's monetary policy mainly depends on "improving the autonomy of growth" and "improving the efficiency of economic growth".

On the one hand, the stronger the internal circulation capacity of China's economy, the greater the possibility of economic development being independent of developed countries, and the higher the initiative to participate in the external circulation; on the other hand, from the perspective of international experience, the competition between countries It is mainly competition for growth efficiency, which is the anchor for determining monetary policy.

　　Shen Minggao said that the exchange rate of a country's currency is determined by the real interest rate difference in the short term, the monetary policy difference in the medium term, and the economic fundamentals in the long term. The core of which is the efficiency of growth, including the competitiveness of the manufacturing industry.

　　As the Federal Reserve officially entered the interest rate hike cycle this year, the monetary policies of major economies around the world tend to be tightened, while China still maintains a prudent monetary policy.

Shen Minggao said that so far, the misalignment of monetary policies between major developed countries and China is not common, and the main reason for this this year is the asynchrony of economic fundamentals.

The "EM (emerging markets) stagnation and DM (developed countries) inflation" represented by the United States and China are the fundamental reasons that lead to "the United States raises interest rates and China reduces interest rates".

　　He further said that from the perspective of economic fundamentals, interest rate hikes in developed countries may not be sustainable.

The risk of a recession in the United States next year is high, and the possibility that the Fed will shift from a rate hike cycle to a rate cut cycle around the summer of next year cannot be ruled out, thereby ending the dislocation between China and the United States.

But in the short term, interest rate hikes in most countries around the world, including the United States, will have an important impact on China.

　　These short-term impacts include: compressing the room for adjustment of China's monetary policy; negative interest rate differentials between China and the United States, increasing the pressure on RMB depreciation; the consequences of the economic recession brought about by interest rate hikes in the U.S. economy, worsening the lack of global aggregate demand and increasing China's exports of uncertainty.

　　"We should pay attention to the uncertainty of the external environment and its changes, take proactive policy measures in a timely manner, and increase policy transparency to stabilize the market and investors' expectations." Shen Minggao suggested that appropriate de-realization should be considered; Opportunities for direct financing in the cycle; we must pay attention to consumption and increase the proportion of consumption; we must deploy long-board industries with scale and innovation advantages; we must improve the ability to dispose of distressed assets.

　　He also emphasized that such an environment is also a rare opportunity for consumption and manufacturing upgrades.

Global experience shows that the rise of great powers and the birth of outstanding companies often occur in adversity, and the period of transition between new and old kinetic energy is a good time for layout.

　　For example, Shen Minggao said that in 2012, China proposed to increase the proportion of direct financing, in 2015, it proposed the transformation of new and old kinetic energy, and in 2018, it proposed high-quality economic development. The real estate transformation is precisely an important period of opportunity to realize these changes.

Only through the painful period of transition between new and old kinetic energy can we achieve high-quality development without real estate leadership, and in the post-real estate economy period, the advantages of direct financing can truly be brought into play.

　　Reform is the "power source" of China's economic development. In order to make policies more effective, where should future reforms start?

　　Shen Minggao believes that to promote structural adjustment through reform and cultivate new growth drivers with high efficiency, there is a lot of room for reform to tap potential in these areas.

For example, using income redistribution as a starting point to increase the proportion of consumption in the entire economy; to support and protect innovation.

　　At the same time, to give full play to the fundamental role of the market in allocating resources, the boundary between the government and the market should be clarified, the arbitrariness of intervention in price signals should be reduced, private property rights should be protected, and clear traffic lights and exit mechanisms should be established in advance and strictly enforced. Establish a clear "establish first and then break" mechanism and investor protection mechanism.

　　He also mentioned that it is necessary to combine long-term and short-term, to achieve stable growth in the short-term, and to create conditions for the conversion of medium- and long-term kinetic energy.

In the short term, it is necessary to provide policy supporting measures for real estate transformation to hedge the negative impact of real estate adjustment on the entire economy.

In the long run, we must adhere to "focusing on economic construction", improve decision-making transparency, predictability, and sense of scenarios, so as to establish a long-term mechanism for stabilizing expectations.

(Finish)