How can China's macroeconomic policies "turn smoothly"?

(Observation of the NPC and CPPCC) How can China's macro policies "turn smoothly"?

　　China News Agency, Beijing, March 6th (Reporter Xia Bin) Is there any "timely rain" from the central finance for grassroots operations?

Will small and micro enterprise financing hit the "spring door"?

Can the preferential policies of tax reduction and fee reduction be "red envelopes"?

The 2021 government work report puts out a "reassurance": macroeconomic policies should continue to relieve market players, maintain the necessary support, and do not make a sharp turn.

　　In response to the impact of the epidemic, China took a number of special measures last year: the deficit rate is planned to be above 3.6%, the issuance of 1 trillion yuan (RMB, the same below) anti-epidemic special treasury bonds, the establishment of a direct funding mechanism, and M2 (broad money supply) ) And the growth rate of social financing has increased significantly... Rapid response and precise policy implementation, the economic "score" of 2020 has shown that China is coming out of the negative shadow of the epidemic.

　　"We don't turn in a hurry. It's a manifestation that we are not in a hurry," but the curve still needs to be turned." Yang Changchang, a member of the National Committee of the Chinese People's Political Consultative Conference and chief economist of Shenwan Hongyuan Securities Research Institute, told a reporter from China News Agency.

In his view, China's recovery of growth this year is a high probability event. When economic growth gradually returns to a normal level, the extraordinary actions in extraordinary periods should not be copied and used in a "package", and some can be withdrawn smoothly.

　　In the government work report, there are three "general keynotes" for macro policies that do not make a quick turn-continuity, stability, and sustainability.

Yang Changchang said that this requires that the macro policy cannot be loosened where it should be supported, and where it cannot be withdrawn, it needs to be retained, but it must also leave room for policy operations in the future, and the bullets cannot be emptied all at once.

　　Liu Shijin, deputy director of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference and former deputy director of the Development Research Center of the State Council, believes that "not making a sharp turn" lies in two points.

First, China's economic growth, especially in the consumer sector, has not yet fully recovered, and is still in the process of gradual recovery; second, there is greater uncertainty in the global economy, and some special policies during the epidemic will continue.

　　In fact, the secret of “not in a hurry” turning is hidden in the government work report.

For example, it is a turning point that the deficit rate is planned to be around 3.2% and the issuance of special anti-epidemic treasury bonds is a turning point, and the inclusion of 2.8 trillion yuan of central fiscal funds into the normalized direct mechanism is "not urgent."

　　Yang Changchang said that this year's grassroots fiscal revenue is still difficult, especially the results of poverty alleviation need to be consolidated, and the central and western regions need support. Under this circumstance, direct funds have solved local concerns. This has handled the policy turn and maintained policy continuity. The financial manifestation is that "difficulty gaps are rising, and financial support is shifting downwards."

　　Another example is that the growth rate of money supply and the scale of social financing basically matches the nominal economic growth rate is a turning point. Large commercial banks inclusive of loans to small and micro enterprises have increased by more than 30%, and the overall financing costs of small and micro enterprises have stabilized and decreased. ".

　　Li Daokui, a member of the National Committee of the Chinese People’s Political Consultative Conference and dean of the Institute of Chinese Economic Thought and Practice of Tsinghua University, said in an interview with a reporter from China News Agency that monetary policy should remain stable and continue to interact with the international market. The current international situation is still loose. If China tightens too quickly, there will be risks. At the same time, various departments should clarify the truth and allow monetary policy to support companies that are truly competitive in the long-term but encounter operational difficulties in the short term. Those companies that should have been eliminated cannot account for the epidemic. The "cheap" of the policy has been blindly protected.

　　“It’s an important indicator that we don’t make a quick turn and make a smooth turn. That’s the macro leverage ratio.” Liu Shijin pointed out that before the outbreak, China had reduced the macro leverage ratio through a lot of work such as preventing and controlling financial risks. However, the special environment of the epidemic last year was different. To allow the macro leverage ratio to rise, a smooth policy transition will be used in the future to allow the macro leverage ratio to fall again.

　　Turning on the "turning lights" and fully communicating with the market, China has given very clear policy guidelines: a proactive fiscal policy must improve quality and efficiency, and be more sustainable; a prudent monetary policy must be flexible, precise, reasonable and appropriate.

Cheng Shi, chief economist of ICBC International, said that this kind of policy mix that retains a certain amount of policy leeway and is not eager to make a sudden turnaround will help the smooth operation of the Chinese economy and the rational return of the financial market.

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