Interpretation of China's financial policy in 2004 introduction: what impact will a tighter monetary policy have on entrepreneurs? The introduction of China's financial policies continues the tradition under the planned system. At the beginning of the year, work was arranged and financial policies were issued. There are three key points in the financial work in 2004, one is to control the growth of the total amount of new credit, the other is
what impact will a "tighter" monetary policy have on entrepreneurs
the introduction of China's financial policies continues the tradition under the planned system. At the beginning of the year, work was arranged and financial policies were issued. The financial work in 2004 focused on three aspects: first, controlling the growth of the total amount of new credit, second, stabilizing the exchange rate, and third, the reform of state-owned banks
loans may be more difficult and financing costs may increase
among national economic policies, monetary policy has a greater impact on enterprises. In 2004, the interpretation of China's monetary policy was one word, "tighter". The expected regulation target of monetary policy in 2004 is that M1 (narrow money, cash and demand deposits) and M2 (broad money, m1+ time deposits) increased by about 17% respectively, while in the past 2003, M1 and M2 increased by 18.67% and 19.58% respectively; Total loans increased by 2.6 trillion, more than 300 billion less than the 2.99 trillion in 2003. This is a signal of policy change sent by the central bank according to the market situation after the relatively loose monetary policy for five or six consecutive years. Although there are different judgments about whether China's economy is overheating, in most cases, different judgments are caused by people's expectations of monetary policy from different occupations, industries, regions and perspectives. Entrepreneurs, especially real estate developers, want a loose monetary policy, so compared with the short-term mechanical performance test, a low interest rate policy; Government officials at all levels hope that GDP will grow faster and more new jobs will be created than their predecessors; Securities companies hope that the stock market will become more popular. However, the central bank, which is responsible for safeguarding the stability of the RMB value, is more sensitive and macroscopic to the stability of the currency value than other industries, departments and even the government
what is the impact of a "tighter" monetary policy on entrepreneurs than in previous years? What are the characteristics of Chinese style monetary policy
first, loans will be more difficult than in previous years, especially in the industries listed by the central bank, such as steel, highway, cement, urban construction, automobile, real estate, etc. the upstream and downstream industries and industries involved in these industries almost cover the entire national economy. Therefore, assuming that the central bank has a "tighter" monetary policy, most enterprises will find it more difficult to lend than in previous years. Second, the interest rate has the possibility and space to adjust upward, and the financing cost of enterprises will increase
the implementation of monetary policy also has "weaknesses"
however, the formulation of monetary policy is one thing, and the implementation of monetary policy is another. Compared with the mature market economy, China's monetary policy has its own characteristics. The first is that the monetary policy is "strong" and lacks its "flexibility". The second is that China's central bank lacks an environment for effective policy implementation. This is due to the lack of monetary policy tools of the Central Bank of China and the non independence of the central bank. We know that the monetary policy tools of the central bank with a mature market economy are a "combined fist", including interest rates, open market operations, exchange rates, reserve ratios, discount windows, and so on. China's exchange rate is "pegged" to a foreign currency, losing a sharp weapon; The interest rate has not yet been marketized, and it has lost a sharp weapon; Due to the regulation of interest rate, the policy transmission of discount window and open market operation is blocked, and most of its sharp edges are lost; The "credit line management" under the planned economy has been canceled, and one of its sharp tools has been lost. What remains is the reserve ratio, the official adjustment of interest rates, the rediscount of large discounts and open market operations. In the fourth quarter of last year, in order to control the excessive growth of credit, the central bank adopted the policy of raising the reserve ratio and "moral advice"
the second "weakness" of China's monetary policy is that, unlike most market economy countries in the world, the law of the people's Republic of China on the people's Bank of China just passed stipulates again that China's central bank is completely under the leadership of the government and has no independence. As a result, China's monetary policy is not "the monetary policy of the central bank", but "the monetary policy of the government". The important difference between the government's monetary policy and the central bank's monetary policy is that safeguarding the stability of the RMB value is only one of a series of important policies of the government in terms of GDP growth rate, employment increase, balanced development of regional economy but high profits, maintaining export growth, etc., while safeguarding the stability of the RMB value is the only goal pursued by the central bank. Obviously, when the pressure of inflation is not enough to damage the growth of GDP, when inflation has not produced a heavier pressure than employment, and when inflation is only a possibility or sign, it is also a difficult choice for the government to resolutely adopt a "tighter" monetary policy
the prediction of China's monetary policy in 2004 is useful for the government, especially the electronic universal experimental machine: the central bank has felt the pressure of inflation, and is trying to adopt a moderately tight monetary policy. At the same time, it hopes to avoid too much impact on the national economy. However, whether the tighter monetary policy can be truly implemented ultimately depends on what is the most important problem and challenge faced by the central government
there are many variables that affect the exchange rate
another key point of the financial policy or reform in 2004 is the stability and reform of the exchange rate. The official statement is to gradually improve the RMB exchange rate formation mechanism and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. What is "formation mechanism", I'm afraid not many people can understand it; What is "reasonable and balanced", what market supply and demand decide is reasonable and balanced, so what is reasonable is balanced, and balanced is naturally reasonable; The percentage change is called "basically stable", which is confused. Although there are many "exchange rate hypotheses" in theory, in fact, my understanding is that exchange rate is the result of "market encryption". There is no doubt that market supply and demand determine the basic and long-term trend of the exchange rate, and the "conspiracy" on this basis determines the short-term fluctuations. In terms of the long-term trend, the trend of a country's exchange rate is in direct proportion to the relative expansion of its economic scale in the global economy and the relative improvement of its economic competitiveness in the global economy. We only need to compare the exchange rates of Germany and Japan 30 years ago, Taiwan, South Korea and Singapore more than 20 years ago with today's exchange rates, and it is not difficult to find the rules. As long as China's national strength continues to strengthen and its global competitiveness continues to improve, the strengthening of the RMB will be a long-term trend. However, in the short term and in 2004, it is a multivariable random event. These variables are important, such as international balance of payments, price, economic growth, employment, international environment, supply and demand of important energy, as well as domestic and foreign political factors. This is a complicated and ever-changing market in which different people have different opinions, which is often surprising. For entrepreneurs, all they can do is take various measures to avoid short-term exchange rate risk. Unfortunately, our banks can provide too few tools to avoid exchange rate riskAt the end of 2003, the government decided to use the national foreign exchange reserve of 45billion to inject capital into two state-owned commercial banks. Although the author put forward different views on the injection from the process, the impact on the national economy and the performance of the reform (see the second issue of Chinese entrepreneurs, 2004), after all, this is the beginning of the reform of state-owned commercial banks
if we temporarily put aside that the product operated by banks is "money", the nature of banks is no different from the various enterprises operated by our entrepreneurs. Banks are enterprises, which operate money. It should be market-oriented, constantly reduce costs, continue to innovate, produce new products, improve efficiency, expand the market, strengthen management, reduce risks, and increase profits, with the goal of creating the maximum return on shareholder investment value. We say this to explain that, compared with monetary policy and exchange rate policy, which have a certain professional and theoretical nature, entrepreneurs may be more insightful and have a deeper understanding of the causes of banking problems in terms of the institutional reform of their banks. 3. The connecting part of the piston rod and the swing rod is not flexible: adjust the connecting part of the two. Imagine an enterprise that has no impulse for product innovation, an enterprise that has no independent rights in almost all aspects, an enterprise that can survive by producing a large amount of waste products (loans) all year round, and an enterprise whose leader (president) is appointed by the organization. If it wants to carry out a heart washing reform, I'm afraid it can't work by "blood transfusion". We can imagine that this "blood transfusion" is not a "feat" of bank reform, as some scholars say, but a helpless choice. Because the government bears too much moral, legal, political and governance risks. And this kind of risk increases because of the undisclosed use of "financial technology" to the public
the premise for the success of bank reform is to reform the government's regulatory philosophy and philosophy towards banks. Banks should not only be regarded as a tool for managing and ruling the economy, but first of all as an enterprise and industry. It is very important to point out this point, because it is the most easily ignored place in the process of learning from the west, and it is the "implicit premise" of creating the western banking system. This "implied premise" is rarely mentioned in the treatises on Western banks or enterprises, because since the French Revolution and the American Declaration of independence, the institutional and constitutional arrangement of "government power" and "enterprise (or citizen) rights" has been a self-evident premise and mature cultural environment for the development of modern enterprises and citizens, and for us, Even for the society in the "Chinese language" environment, it is strange. This article does not intend to discuss this, but just points out that due to the public welfare and sociality of the banking products and the importance of the banking industry to the national economy, the government power has been unscrupulously expanded in the banking industry while other industries and industries continue to reduce and restrict, and now there is a further trend of "strengthening and strengthening supervision", and the rights of banks have disappeared, How can this produce a competitive banking and financial industry. It should be mentioned that a proposition about "power" and "right" derived from the discussion of political science and ideology has a market in China's financial sector, that is, "a bad government is better than no government", that is, "an inefficient but 'stable' financial system is also better than a competitive but more 'destructive' bank". The natural expansion and cruelty of "power" and the natural greed of "rights", how to systematically arrange the "power" of the government and the "rights" of banks, is the "deadlock" of China's banking reform