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China's current macroeconomic regulation and control viewed from 1997 Asian financial crisis.
Several noticeable problems in the current economic situation and macro-control

At present, the adjustment of China's economic structure overlaps with the cyclical downturn of the world economy. How to adjust the economic structure more effectively and prevent the economic growth rate from falling sharply is one of the important topics facing macro-control.

The growth rate of money supply M 1 dropped rapidly.

In this round of economic cycle changes, the performance of M 1 is very prominent. From 2006 to August 2007, the growth of M 1 accelerated continuously, and finally reached the peak of 22.8%. Since the fourth quarter of 2007, the growth rate of M 1 has shown a rapid downward trend. By August this year, the growth rate of M 1 1.5% was nearly half of the peak in 2007, which was close to the lowest level in history since 1996.

Although many people think that M2 is more suitable as the intermediate target of China's monetary policy than M 1, from the historical data, M 1 can predict the change of CPI better than M2 (see figure 1). Almost every time M 1 rises or falls rapidly, CPI will rise or fall accordingly, with a time lag of about six months to one year. Theoretically speaking, M 1 is composed of cash and demand deposits, which can better reflect the change of actual demand, so it can better explain the change of consumer price index. If the correlation between M 1 reflected by historical data and CPI remains unchanged, then the current decline in CPI growth rate can be said to be the result of the previous decline in M 1 growth rate, and the current further decline in M 1 growth rate indicates that the price level may fall further.

However, it cannot be simply judged that the sharp decline in the growth rate of M 1 indicates that the economic growth rate will also drop sharply. Judging from the past, the growth of M 1 experienced three rapid decline periods: first, from the second half of 1997 to the first half of 1998; 2. From September 2000 to the end of 200 1; The third is from 2004 to the beginning of 2005. These three periods all lasted for about a year. During or shortly after the first two periods, the economic growth rate dropped to a lower level. However, in the third period, China's economic growth rate not only did not decline, but further accelerated. This shows that we can't simply draw the conclusion that the economic growth rate will drop to a lower level based on the current low growth rate of M 1.

Some people often judge whether the money supply is appropriate by subtracting the sum of GDP growth rate and CPI growth rate from the money supply growth rate. A large balance means that there is too much money supply, while a small balance means that the money supply is tight. Because the current growth rate of money supply is less than the sum of GDP growth rate and CPI growth rate, especially the growth rate of M 1 is much less than the sum of GDP growth rate and CPI growth rate, some people think that tight money supply will have a negative impact on economic growth. In fact, from the past, it is difficult to judge whether the money supply is moderate by this method, because there is no obvious correlation between the balance of the growth rate of money supply MINUS the sum of GDP growth rate and CPI growth rate and GDP growth rate (see Figure 2).

This method is actually equivalent to judging whether the money supply is moderate by comparing the money supply with the money demand. However, this method does not consider the influence of money circulation speed when measuring money demand, which makes the result difficult to explain. If the speed of money circulation slows down, the demand for money to produce the same GDP will increase; If the speed of money circulation becomes faster, the demand for money to produce the same GDP will decrease. Therefore, if the change of money circulation speed is unstable, then the relationship between money supply and economic growth is uncertain. In the long run, the speed of money circulation in China is gradually accelerating, so under the same economic growth rate and the same price increase rate, the growth rate of money supply will decrease, and the balance after subtracting the sum of GDP growth rate and CPI growth rate will also decrease. However, in the short term, due to the influence of financial innovation and monetization process, the growth rate of money circulation rate fluctuates greatly, so it is difficult to predict the change of money circulation rate, so it is difficult to judge the change of GDP growth simply based on the change of money supply growth rate.

Although we can't simply judge the economic trend according to the change of M 1, as an important financial indicator, its change comprehensively reflects some changes in the economy and is an important information variable. Therefore, it is necessary to pay attention to the current changes of M 1 and analyze it in combination with other financial conditions.

The nominal effective exchange rate and the real effective exchange rate of RMB accelerated appreciation.

Although the pace of RMB appreciation against the US dollar has slowed down recently, the RMB has changed from depreciation to rapid appreciation against the euro, pound and yen, which has accelerated the appreciation of the nominal effective exchange rate and the real effective exchange rate of RMB. According to the data of the Bank for International Settlements (BIS), from June 5438 to August 2008, the nominal effective exchange rate of RMB appreciated by 7.0 1%, and the real effective exchange rate appreciated by 7.65%. At present, both the nominal effective exchange rate and the real effective exchange rate of RMB are close to the highest level since 1995.

Theoretically, the effective exchange rate reflects the external changes of a country's currency more comprehensively than the bilateral exchange rate, so it has a greater impact on the balance of payments. Judging from the past situation in our country, the same is true. During the period from September 1995 to September 1998 in 2000 and from August 2000 to March 2002, although the exchange rate of RMB against the US dollar remained stable, the effective exchange rate of RMB appreciated greatly, so the trade surplus or capital account surplus in these two periods decreased. In 2006-2007, although the RMB appreciated rapidly against the US dollar, the effective exchange rate of RMB did not change much, which did not lead to the reduction of China's balance of payments surplus.

It should be said that RMB appreciation is the result of China's economic development, and it is also an important means to solve China's international balance of payments imbalance and promote economic restructuring. However, for the change of RMB effective exchange rate, we should not only consider its impact on import and export and trade surplus, but also consider its impact on the overall economic operation.

Some countries in the world judge the tightness of the financial environment by calculating the monetary condition index. The so-called monetary condition index is the weighted sum of interest rate and exchange rate changes relative to the base period, which shows the importance of exchange rate to the whole economic operation. In fact, if we use common financial indicators such as money, credit and interest rate to analyze and judge the situation, we can better explain the problem by taking exchange rate factors into account. For example, the growth rate of M 1 mentioned in the previous article can't explain the change of GDP well, but it can be explained if the exchange rate factor is taken into account. From the second half of 1997 to the first half of 1998 and from September 2000 to the end of May 2006, the growth rate of M 1 dropped to the bottom, and the effective exchange rate of RMB gradually appreciated to the peak. The simultaneous contraction of both sides has led to a decline in economic growth. However, from 2004 to the beginning of 2005, although the growth rate of M 1 also dropped significantly, the effective exchange rate of RMB depreciated more, which offset the impact of monetary tightening, so the GDP growth rate continued to accelerate.

Therefore, to pay close attention to the appreciation of RMB effective exchange rate, we should not only consider its impact on import and export, but also comprehensively judge the tightness of the financial environment and its impact on economic development by combining the indicators such as money, credit and interest rate.

Total demand faces greater downside risks.

Since the beginning of this year, the growth rate of total retail sales of consumer goods in China has accelerated, and the actual growth rate has reached more than 15% after deducting the price impact; The actual growth rate of investment in fixed assets remained at around 16%; Although the growth rate of exports has slowed down, it has also increased by more than 20% in the first eight months. In August, the trade surplus reached 28.69 billion US dollars, a record high. Some people think that China's total demand is still strong, and there is little risk of economic growth decline.

These data do show that China's economy has worked well so far. However, the monthly indicators of China in recent months are quite different from the investment, consumption and net export calculated by expenditure method. It is not comprehensive to explain the total demand with these indicators. Moreover, under the background of declining global economic growth, frequent financial risks and downward adjustment of China's economy, the economic and financial situation is changing rapidly, and the present situation cannot explain the future trend. It depends on the change of total demand, or it depends on the factors that affect total demand.

From the perspective of consumption, the acceleration of consumption growth in the past two years is mainly caused by the following reasons: First, the income of urban and rural residents has increased rapidly; Second, the rapid development of housing and automobile consumption; The third is the wealth effect brought by rising asset prices. In addition, the rapid growth of consumption this year is also affected by two short-term factors: the recent transfer payment from the state finance to the earthquake-stricken areas and the donation from residents to the disaster-stricken areas have also increased the growth of consumption to a certain extent, and the Olympic Games has also promoted the growth of consumption. However, these forces will weaken or disappear in the near future. First, the income growth of urban and rural residents has slowed down significantly. In the first half of the year, the income of urban residents actually increased by 6.3%, far below the growth levels of 12.2% in 2007 and 10.4% in 2006. Although the per capita net income of farmers continues to accelerate, the recent increase in farmers' income is mainly due to the improvement of national rural policies. At present, the policy effect will gradually weaken, and it is difficult for farmers' income to grow continuously and rapidly. Secondly, after a period of rapid development, the consumption of housing and cars has obviously slowed down. Besides, there are still no other powerful consumption drivers. Third, due to the sharp drop in stock prices, house prices in some areas have fallen, and the wealth of many urban residents has shrunk. Fourth, residents in disaster areas will increase their consumption in a short time due to the damage of daily necessities, but after the daily necessities are basically supplemented, the consumption expenditure will tend to be flat. Fifth, the stimulating effect of Olympic factors on consumption will cease to exist after September. Therefore, the growth rate of consumption is likely to slow down from the fourth quarter of this year.

From the perspective of investment, although the growth rate of fixed assets investment has increased slightly month by month in recent months, some changes in investment structure indicate that the growth of investment is unstable. First, the investment growth of newly started projects is relatively low. From June to July, the planned total investment of newly started projects decreased by 2.9%. Although the growth accelerated in August, the year-on-year growth of 65438+1from October to August was only 2.5%. Second, the growth rate of investment in primary and secondary industries has accelerated, but the growth rate of investment in tertiary industry has slowed down; The growth of industrial investment is accelerating, the heavy industry with low marketization in manufacturing industry is growing rapidly, and the food and textile with high marketization are growing slowly; The growth rate of investment in the central and western regions accelerated, while the growth rate of investment in the eastern region slowed down. It shows that the current investment growth is mainly driven by the government, and the investment growth directly driven by the final demand and the market has weakened. Third, the growth rate of real estate development investment continued to slow down, with a year-on-year increase of 29. 1% from June to August, which was 1.8 percentage points lower than that from June to July. In recent years, the rapid growth of real estate investment has been an important factor driving the overall investment growth. Judging from the reasons that affect investment, the rapid growth of corporate profits in recent years is the fundamental reason that affects the rapid growth of investment, but the profit space of enterprises has been greatly compressed recently, so the motivation for investment growth has weakened.

From the perspective of exports, although the export growth rate is still high, especially in August, the surplus growth exceeded expectations, but compared with 2007, the export growth rate dropped sharply, and the trade surplus also decreased significantly. From June to August this year, foreign trade exports increased by 22.4% compared with the same period in 2007, and the growth rate slowed down by 5.3 percentage points; The trade surplus decreased by 6.2%, with a net decrease of $6,543.8+$0.008 billion. Judging from the future situation, China's export demand will further slow down due to the recent pessimistic world economic situation, especially the negative growth of European economy and Japanese economy in the second quarter of this year. Coupled with the recent acceleration of RMB appreciation against the euro and the yen, the export growth rate may further decline, and the situation of high surplus growth in August is difficult to sustain.

Based on the above factors, the total demand of China will face a greater risk of decline in the future, which may affect the further decline of economic growth.

Producer price index (PPI) continues to rise.

While the recent CPI increase has dropped significantly, the price increase of upstream products has continued to accelerate. By August, grain prices had risen for five consecutive months, and the ex-factory price of industrial products reached 10. 1%. In this case, whether the inflationary pressure is indeed reduced and whether the price increase of upstream products will lead to CPI rebound has become the focus of attention in all aspects.

Judging from the past situation in China, although there is a certain correlation between PPI and CPI, many people have explained how far and how long the change of PPI will lag behind, but the actual situation proves that the method of judging CPI change through PPI change is not reliable. For example, in June 2004, 5438+ 10, when the PPI reached its peak, the CPI showed a downward trend. At that time, there was a lot of debate about whether the high growth of PPI would affect the rebound of CPI, but from the actual results, not only did CPI not rebound obviously, but the high growth of PPI did not last.

This is not just an accident. Theoretically, whether PPI will be transmitted to CPI depends on the demand of the final product. If the demand for the final product is strong, the increase of PPI will be transmitted to CPI to a large extent; If the final demand is not strong, then the upward pressure of PPI will be more absorbed by production enterprises. When the final demand drops, it will affect the gradual decline of the demand for intermediate products, and CPI will drop first and then drop.

Judging from the current situation in China, the total demand has weakened recently, so there is little pressure for PPI to be transmitted to CPI. Moreover, judging from the changes of upstream product prices, there is great uncertainty in the trend of international commodity prices. In August this year, the ex-factory prices of China's means of subsistence continued to fall, and the increase in the purchase prices of raw materials, fuel and power also fell slightly. Whether PPI will continue to rise is also worthy of attention.

However, if PPI remains at a high level, even if there is little pressure on CPI in the short term, it will also be a major factor affecting the smooth operation of the economy. If there is obstruction in the transmission of PPI to CPI, it will first lead to the decline of profits of some enterprises, resulting in difficulties in production and operation of some enterprises, and even losses and bankruptcy. However, when it is difficult for most enterprises to digest the increase of PPI, the increase of PPI will eventually lead to the increase of CPI. Therefore, the risk of rising PPI will not only affect the price, but also affect the production.

It is necessary to enhance the pertinence and flexibility of macro-control policies

At present, the adjustment of China's economic structure overlaps with the cyclical downturn of the world economy. How to adjust the economic structure more effectively and prevent the economic growth rate from falling sharply is one of the important topics facing macro-control.

Fiscal policy should focus on improving people's livelihood and provide strong support for enterprises' innovation and entrepreneurship activities.

At present, many people suggest that fiscal policy should be strengthened to support economic growth. Indeed, in China's economic restructuring, we must give full play to the role of fiscal policy in order to maintain steady and rapid economic growth while facing external adverse shocks. However, how to play the role of fiscal policy is a problem that needs attention at present. After the Asian financial crisis, in order to resist the adverse impact of the decline in external demand, China implemented a proactive fiscal policy, mainly to increase infrastructure construction. It should be said that the fiscal policy at that time played a positive role in promoting economic growth and provided good infrastructure conditions for the rapid economic development in the next few years. However, we should also see that the active fiscal policy implemented at that time had limited stimulating effect on total demand in the short term. From 1998 to 2000, the growth rate of the total retail sales of social consumer goods in China was all below 10%, of which 1998 and 1999 only increased by 6.8%; In the same period, the growth rate of fixed assets investment is also very low. The growth rate of fixed assets investment in the whole society has been very low in the last two years, except that 1998 is 5. 1 percentage point higher than the previous year, reaching 13.9%, of which 1999 is only 5.2%. In fact, if consumer demand is weak, the increase of government investment can not drive the increase of private investment, so fiscal policy must consider more how to promote consumption growth while stimulating total demand. At present, after years of high investment growth, China's investment rate has risen to a higher level, while the contribution rate of consumption to economic growth is still low. In the current situation of declining external demand, if domestic consumption cannot increase substantially, a substantial increase in investment will only lead to overproduction. Therefore, the recent fiscal policy should avoid simply increasing investment expenditure, but focus on improving people's livelihood, increasing social expenditure, increasing subsidies for low-income families, residents' pension, medical care and education, and promoting further consumption growth.

On the other hand, because the current export structure and industrial structure are in a difficult adjustment period, fiscal policy should also serve the adjustment of economic structure. In addition to implementing the policy of "maintaining pressure", we should also actively use tax policies and financial subsidy policies to provide services for enterprise transformation, innovation and entrepreneurship.

Monetary policy should be adjusted flexibly, with emphasis on policy strength.

At present, the People's Bank of China, like many central banks in the world, is faced with the risk of preventing both economic growth decline and inflation. How to correctly judge the two risks and achieve the balance between economic growth and price stability is a common problem faced by central banks all over the world. Judging from the current situation in China, the tight monetary policy in the early stage has achieved results, the monetary and financial environment has been obviously tightened, the overheating of the economy has been curbed, and the rising rate of CPI has gradually decreased. At present, it is very important to adjust monetary policy flexibly according to the comparative changes of economic growth decline risk and inflation risk.

At present, in the process of monetary policy decision-making and operation, we should pay attention to two aspects: First, grasp the intensity of monetary policy operation according to the characteristics of this round of inflation. The causes of this round of inflation are quite different from those of previous inflation in China. In the past, inflation was caused by the outstanding total demand inflation, but this round of inflation not only has the role of high total demand, but also has the role of international input factors and cost drivers. The expansion factor of total demand should be controlled by tight monetary policy; But for international input factors and cost drivers, the role of monetary policy is very subtle. On the one hand, international imported inflation and cost-driven inflation often need the expansion of money and credit to finally form, so we must maintain a tight monetary and financial environment when controlling international imported inflation and cost-driven inflation; On the other hand, the monetary and credit crunch has an indirect effect on international imported and cost-driven inflation factors, and it takes a long transmission time, especially for short-term price increases, which is difficult to control. If we blindly adjust monetary policy according to short-term price changes, it may lead to excessive tightening of total demand. Therefore, in the presence of international input factors and cost-driven factors, it is necessary to pay special attention to the intensity of monetary policy operation. We should judge the implementation effect of monetary policy more by the price index closely related to the final demand, rather than determining the orientation of monetary policy too much by PPI; Pay more attention to the long-term price trend, and don't care too much about the short-term price changes.

Second, it is necessary to comprehensively analyze the current financial environment, which depends on the growth of money and credit, the change of interest rate, the change of exchange rate and the situation of capital market. Some economists at home and abroad judge whether the financial environment is loose or too tight by calculating the monetary condition index or the financing condition index. The change of interest rate and exchange rate is comprehensively considered in the monetary condition index, while the change of interest rate and exchange rate is not only considered in the financing condition index, but also the influence of stock market and bond market indicators. At present, the transmission channel of China's monetary policy is expanding beyond the traditional bank credit channel, so it is also necessary to comprehensively judge the impact of changes in various financial conditions on the economy and comprehensively use various policy tools to form a suitable match between various financial indicators.

Accelerate the price reform of primary products.

The prices of resources and factors in China have been underestimated for a long time, which leads to excessive consumption of resources and energy in economic growth. On the one hand, this has contributed to the rise of international primary product prices to a certain extent, and on the other hand, China's economy has been greatly impacted when international primary product prices have risen. Therefore, only by speeding up the price reform of resources and energy, rationalizing the price formation mechanism, and reflecting the scarcity of resources and energy, can we improve the utilization efficiency of resources and energy in our economy and improve our economy's ability to cope with the rise in international primary product prices. At present, China can take advantage of the declining CPI to further promote the price reform of resources and energy. Although the price reform of resources and energy may raise the price level in the short term, in the long run, it will help curb the excessive demand for resources and energy and promote the stability of resources and energy prices. Moreover, in the case of the current slowdown in CPI growth, the risk of sustained high PPI operation in the current economy can be solved by reforming the price formation mechanism of primary products and adjusting the relationship between supply and demand of primary products, which is more targeted and more direct than the adjustment method of comprehensively reducing total demand and ultimately affecting the demand of primary products.