Accurate force, monetary policy escort high-quality economic development (authoritative interview)
Since the beginning of this year, in the face of the greater impact of the epidemic on China’s economic and social development, the prudent monetary policy has continued to exert force, the transmission efficiency has been further improved, and the financial support for the real economy has been significantly increased, providing for the overall promotion of epidemic prevention and control and economic and social development. A solid and powerful support. In the current complex and severe economic situation, how can a prudent monetary policy be more flexible, moderate, and precise? How to unswervingly deepen the reform and opening up of the financial industry? The reporter interviewed Yi Gang, Governor of the People's Bank of China.
●Increase the counter-cyclical adjustment of monetary policy, and strongly support the stabilization of enterprises to ensure employment
Reporter: The sudden epidemic has brought an unprecedented impact on my country's economic and social development. What financial policies has the People's Bank of China adopted to deal with it?
Yi Gang: Facing the impact of the epidemic, the People’s Bank of China has decisively increased its monetary policy counter-cyclical adjustments and innovated monetary policy tools. The main measures can be summarized in 18 words, namely, “to expand the total volume, ensure supply, promote growth, lower interest rates, and adjust Structure and main body".
We urgently issued 300 billion yuan of special re-loans during the Spring Festival holiday, and achieved positive results in guaranteeing supply; firmly supported the financial market to open as scheduled on February 3 after the Spring Festival, and exceeded expectations for short-term liquidity of 1.7 trillion yuan; After an overall reduction of the deposit reserve ratio by 0.5 percentage point was announced on January 1 this year, the deposit reserve ratio was lowered twice, accumulating 1.75 trillion yuan in long-term funds.
The 300 billion yuan special reloan mainly guarantees the supply of medical supplies and daily necessities. On February 26, we added another 500 billion yuan of re-loan and rediscount lines to support enterprises to resume work and production. On April 20, an additional 1 trillion yuan re-loan and rediscount limit was added to support the full resumption of work and production. The number of monetary policy tools ranges from 300 billion yuan to 500 billion yuan and then to 1 trillion yuan. Under different circumstances, the policy implications are different, the number is increasing, and interest rates are becoming more and more market-oriented. The 300 billion yuan re-lending adopts enterprise list management, and the 500 billion and 1 trillion yuan re-lending re-discount adopts market-oriented operation. Commercial banks use these tools of the central bank to provide lower-cost loans for the real economy and provide strong support Stabilize enterprises to ensure employment.
Reporter: Compared with previous years, the macroeconomic data in the first half of the year has fluctuated greatly, but the financial data is relatively stable. How do you evaluate the financial performance in the first half of the year?
Yi Gang: In the first half of the year, there were indeed many bright spots in the macro financial data, which also shows that the prudent monetary policy has been effectively implemented. From the macro perspective, the financial indicators are significantly higher than last year. At the end of June, broad money M2 increased by 11.1%; the scale of social financing increased by 12.8% year-on-year; new loans in the first half of the year were 12.1 trillion yuan, an increase of 2.4 trillion yuan year-on-year.
In terms of prices, since this year, we have focused on guiding interest rates in major markets to decline. The winning bid rate for the 7-day reverse repurchase operation in the open market dropped by 30 basis points to 2.2%; the medium-term loan facility winning bid rate dropped by 30 basis points to 2.95%; the one-year loan market quote rate (LPR) dropped by 30 basis points to 3.85%; The loan interest rate was reduced by 50 basis points.
Due to the guidance of monetary policy, the overall interest rate of the market has fallen, which has led to a significant reduction in corporate financing costs. In June, the weighted average interest rate for bond repurchase was 1.89%, a decrease of 0.21 percentage points from the end of the previous year; the yield of 10-year treasury bonds was 2.82%, a decrease of 0.32 percentage points from the end of the previous year; inclusive finance, small and micro enterprises, private enterprises, The manufacturing loan interest rates have hit record lows. In particular, the interest rate of inclusive finance loans is currently around 5%, a drop of 0.8 percentage points from last year.
The decline in interest rates has strongly supported the real economy and significantly optimized the loan structure. The market players supported by inclusive small and micro loans have increased significantly. At the end of June, there were nearly 30 million market entities with credit, and more than 23 million with loan balances. These were mainly small and micro enterprises and individual businesses.
●Economic growth will continue to recover in the second half of the year, and it is expected to achieve positive growth throughout the year
Reporter: We have noticed that China's economy has been recovering steadily. The resumption of work and production has improved month by month. The economic growth in the second quarter was significantly better than expected. How do you judge the current macroeconomic situation in China?
Yi Gang: As China has controlled the domestic epidemic, the Chinese economy has achieved the first recovery in the world. Although my country's GDP fell by 6.8% year-on-year in the first quarter, there was a relatively strong rebound in the second quarter, with GDP increasing by 3.2%, making it the only major economy in the world with positive growth.
On the one hand, various industries recovered quickly. In the second quarter, industrial production has achieved positive growth. In June, the national industrial added value above designated size increased by 4.8% year-on-year, which has maintained positive growth for three consecutive months.
On the other hand, demand has gradually recovered. First, investment rebounded significantly, and positive growth began in April. In June, real estate investment grew at 8.5% year-on-year; second, consumption continued to recover, and the total retail sales of consumer goods in the second quarter narrowed by 15.1 percentage points from the previous month; third, exports were significantly better In June, exports achieved positive growth, a year-on-year increase of 0.5%.
While the economy is recovering steadily, the price level remains stable. In the first half of the year, the consumer price index (CPI) rose by 3.8%, and in June it rose by 2.5% year-on-year; the producer price index (PPI) of industrial producers in June fell by 3% year-on-year, and the rate of decline was narrower than before.
We are also very concerned about some issues that affect the current economic recovery: First, the recovery of consumption is relatively lagging. In the first half of the year, per capita consumption expenditure of national residents accounted for 62% of disposable income, a decrease of 8 percentage points from last year. Second, due to the greater downward pressure on the global economy, the constraints on investment growth have been amplified. Third, the recovery speed on the demand side is weaker than that on the supply side, the recovery speed of consumption is weaker than that of investment, and the foundation for economic recovery is not strong yet. Fourth, the current pressure to stabilize enterprises and ensure employment is relatively high. The unemployment rate in the national survey in June was 5.7%. In particular, the recovery of small, medium and micro enterprises and individual industrial and commercial households still faces some difficulties. In addition, due to the relatively large increase in loans and bond financing, and the slight decline in GDP, it is expected that the overall macro leverage ratio will increase over last year.
In general, the characteristics of China's economic potential and resilience have not changed. my country's economic growth will continue to recover in the second half of the year, and it is expected to achieve positive growth throughout the year.
Reporter: Affected by the epidemic, the international situation has become more complex and changeable. Under such circumstances, will the opening of finance, international cooperation and the internationalization of the RMB be affected?
Yi Gang: Regardless of how the international situation changes, the most important thing is to concentrate on doing your own affairs well and unswervingly deepen the reform and opening up of the financial industry. First of all, we must implement the financial reform and opening measures announced in recent years, such as abolishing foreign equity restrictions in securities, fund management, futures, and personal insurance; canceling the investment quotas for qualified foreign institutional investors and RMB qualified foreign institutional investors Restrictions; Approval of American Express, Mastercard, Fitch and other institutions to enter the Chinese market, etc. Second, we must continue to promote the full implementation of the pre-access national treatment plus negative list system, and unify the foreign exchange management policies for the bond market opening up.
China has always advocated international cooperation in the fight against the epidemic. We will continue to participate deeply in global economic and financial governance, earnestly safeguard multilateralism, and constructively participate in the G20 Debt Mitigation Initiative. This will serve as a global development strategy for developing countries, emerging market countries and some low-income countries. Provide certain support for debt reduction.
At present, the momentum of RMB internationalization is very good. In the first half of the year, the amount of RMB cross-border receipts and payments was 12.7 trillion yuan, a year-on-year increase of 36.7%. The RMB has become my country's second largest cross-border receipts and payments currency for eight consecutive years. In the first quarter, the share of renminbi foreign exchange reserve assets in the global official foreign exchange reserve assets exceeded 2%, nearly double that of when it joined the Special Drawing Rights Basket (SDR) in 2016. We will continue to actively and steadily promote RMB internationalization and capital account opening.
●Accelerate the deepening of financial reform and opening up to promote the healthy development of economy and finance
Reporter: What is the focus of the People's Bank of China in the second half of the year?
Yi Gang: In the second half of the year, the People’s Bank of China will continue to conscientiously implement the decisions and deployments of the Party Central Committee and the State Council, adhere to the general keynote of seeking progress while maintaining stability, adhere to the new development concept, focus on supply-side structural reforms, and do a solid job of “six stability”. "Work, fully implement the "six guarantees" task, maintain a moderate and reasonable growth of the macro total, focus on stabilizing enterprises to ensure employment, prevent and resolve major financial risks, accelerate the deepening of financial reform and opening up, and promote the healthy development of the economy and finance. Focus on the following aspects:
First, the monetary policy should be more flexible, appropriate, and precise, and the policies that have been introduced to stabilize enterprises and ensure employment should be implemented and effective. Comprehensive use of multiple monetary policy tools to guide the broad money supply and social financing scale growth rate significantly higher than last year, while paying attention to grasp the rhythm, optimize the structure, and promote the reasonable growth of inclusive small and micro enterprise loans and long-term manufacturing loans.
The second is to maintain the bottom line of risks and continue to fight the battle against major risks. We will accelerate the completion of the shortcomings of the financial risk management system, improve the emergency response mechanism for major financial risks, and move to normalized risk prevention and control and risk management.
The third is to unswervingly promote the orderly opening of the financial industry.
The fourth is to continuously deepen the reform of the financial system and mechanism. Promote the implementation of the financial reform measures that have already been introduced, and support local governments to resolve regional financial risks, do what they can, and deepen the market-oriented reform of rural financial institutions. In the process of promoting reform, it is necessary to maintain the overall stability of the legal person status of rural financial institutions in the county, so as to maintain the integrity of my country's financial system, serve the community, and serve the county economy.
Fifth, continue to do a good job in financial management and financial services, make overall plans for financial poverty alleviation, and deepen pilot projects for green finance, inclusive finance, and technological finance innovation.
Our reporter Wu Qiuyu