Economic recovery to reach consensus 4 trillion stimulus plan fade out idea

Universalis Ninci Luo March 22, Vice Minister of Finance, Wang June, said at the China Development Forum that stimulus policies should not be lightly withdrawn at present, but should actively study the issue of exit strategy. What will be the appearance of such a strategy, and how should the relevant policy time and intensity be matched?　　To this, this newspaper interviewed the Standard Chartered Bank Greater China research director Stephen Green, Central Finance China Banking Research Center director Guo, NDRC Economic Research Institute of Economic Operations and Development research director Wang Xiaoquan, social Sciences and Finance Department researcher Zhiyong Four scholars, together to conceive the future stimulus policy exit possible picture.　　The economic recovery reached a consensus economic observer: in the past two months, macro data show that the economy has rebounded strongly, what is the current monetary and fiscal policy of the state?　　Stephen Green: We basically believe that China's monetary and fiscal policies have started to exit. Fiscal policy has clearly returned to neutral, as can be seen from this year's budget. Budget spending grew by only 6% in 2010, but the growth in budget revenue is expected to reach 6%, and probably more than that.　　As a result, we are likely to see revenue growth exceeding spending growth in 2010, so this year's fiscal policy is a stimulus policy. In China, a large part of "fiscal" means government approval of investment projects.　　At present, the National Development and Reform Commission has apparently suspended approval of large projects and banks ' credit for local government investment projects. Monetary policy, though not yet neutral, is moving in this direction.　　The withdrawal of monetary policy can be more flexible, can be a little later back to normal. Guo: It is inevitable that stimulus policies will have to be withdrawn sooner or later. The Government cannot always take the place of the folk.　　As endogenous economic growth power continues to recover, stimulus policies must exit.　　But while the economy is now recovering, a good, loose monetary environment needs to be taken into account in adjusting the structure of the economy this year.　　Monetary policy cannot be blindly tightened, not as deformed as it was last year, but not mechanized, and should bring monetary policy back to a reasonable and modest space. Do not let monetary policy in the macroeconomic, always in a conspicuous position.　　Relatively speaking, fiscal policy this year to play a larger space, because to solve the problem of income distribution, to solve the problem of protection, to solve the problem of expanding consumption rate.　　Fiscal policy should be more positive than monetary policy, both for the sake of the sustainability of economic growth and for the need to adjust the structure of the economy. Wang Xiaoquan: Monetary policy has started withdrawing since last August. For the moment, the withdrawal is mainly about monetary policy and there is no disagreement on fiscal policy, at least this year fiscal policy will remain positive.　　From the monetary policy point of view, I think in the current situation, we can continue to withdraw. Zhiyong: I personally think that the exit has not yet arrived, the earliest to wait for the March data out, preferably the May data out, and then analyze the ThornThe stimulus policy fades out to be more accurate.　　Rate hike time Window economic Observer: Next, if our stimulus policy chooses to withdraw, how to retire, who first? Green: Monetary policy withdrawal now needs to be further.　　From the current trend of credit growth, it is possible to adjust the reserve requirement ratio per two months. The Government must respond to this expectation because the people expect inflation to come in the coming years. Raising interest rates is a good way to guide people's inflation expectations. Originally we are negative real interest rate, so I think the rate hike plus one or two times should be.　　And it's time to raise rates, and a 27% rise in interest rates shouldn't be worrying.　　We believe that there is still a lot of uncertainty in the second half of the year, but from the current macroeconomic situation, all the data into a rational recovery, the appropriate, step-by-step exit is no problem. Wang Xiaoquan: Monetary policy should gradually withdraw, credit scale expansion is slow, last year credit increment reached more than 9 trillion, this year target is 7.5 trillion, I think the last 5 trillion or 6 trillion is OK. Then let the market play a role.　　In addition, since our GDP 8% is no problem, we need to accelerate the restructuring.　　However, I think the monetary policy has not yet been to raise interest rates, the current stage should curb real estate, the abolition of preferential mortgage rates.　　In the future, if bank lending continues to grow rapidly, the reserve requirement ratio needs to be adjusted. Zhiyong: Although the economy has rebounded steadily, the foundation is not so strong, for example, March may have a new phenomenon, trade deficit.　　In terms of consumption, investment and exports, the economy as a whole is not so stable now. But even if the economy does not lift, fiscal policy is unlikely to expand in the long term, and there is a need for alternative approaches.　　If the State Council executive meeting recently proposed that the transport, telecommunications and other industries open to private capital, which is to lay a good foundation, once the government's stimulus policy is no longer effective, the role of the private market can make the economy stable and sustainable. I think the monetary policy is in the first step.　　Because many of the government's policies play a role or rely on fiscal policy, the most important role of money is to provide a market economy price signals, price signals can not always be disrupted, otherwise the whole market cannot make decisions.　　The rate hike should be the last option, because the impact of the rate hike is very large, it directly determines a lot of consumption.　　Economic Observer: How much credit is more appropriate this year? Green: Whether the bank's CBRC can control the size of the 7.5 trillion credit is key this year. Compared to this, raise interest rates, increase the reserve requirement ratio is a fine tune. In the one or two quarter, it is the biggest challenge for the central bank and the CBRC to have the credit scale controlled within a certain range. This is also the most effective monetary policy at the moment.　　There is a saying in the market that the size of new loans in March is controlled by 500 billion, which means credit is under control. 4 trillion of the investment, a large part of the bank loans to the government financing platform formed, as the CBRC and the central bank on this part of the loanTightening, we can say that the government's investment in the stimulus is weakening. At the same time, fiscal policy is weakening.　　China's monetary and fiscal policies are very closely linked, not on two lines. Guo: The credit scale is not so scary, the key is to grasp the flow, is to stimulate output, not to stimulate inflation and stimulate bubbles. From the perspective of the real economy, if the enterprise really has such a large demand for capital, and you are not to lend, I am afraid it is wrong.　　But property developers should not get loans from banks. Loans do not tighten, the key is not to see how much money, but to see the efficiency of the use of funds, where money is invested, whether money can form benefits.　　This year, the size of new loans will be 7 trillion or 8 trillion.　　Exit Schedule Economic Observer: what factors affect the exit timetable for stimulus? Stephen Green: I think the first half of the stimulus will be phased out, and by 6 July the central government may think again about how to adjust the policy. may be the interest rate hike, may be the deposit reserve ratio, may be the real estate industry loan control. U.S. economists believe that U.S. house prices may fall again in the second half of the year, the loan situation will worsen further, the Fed may continue to pursue loose monetary policy. In the second half of the year the United States is still worried about shrinking, which will affect decision-making at decision-making levels in China.　　So there is a chance that China will stop withdrawing.　　There is also a theory that if GDP is growing at 10%, the lending rate should be 10%, but China's GDP growth has been higher than the loan rate for so many years, which is also seen as an irritant monetary policy, from a certain point of view, China's monetary policy has been stimulating.　　Zhiyong: Fiscal policy from expansion to neutral, should not this year, from the tax policy, such as value-added tax, income tax and so on are institutional reforms, these incentives are no longer likely to return to the original, and some temporary concessions such as vehicle purchase tax has been clearly discounted to the end of the year, so it is more difficult to abolish these tax cuts.　　The central government's 1.18 trillion investment this year still has more than 960 billion more to spend, which has been planned for the year, with little likelihood of a reduction, and a 4 trillion-year stimulus package.　　I think that if the exit, whether the tax cuts are investment or loans will be at the same time exit. Wang Xiaoquan: The withdrawal we're talking about is just a stimulus to the economy. Retreat that is, such as the withdrawal of fiscal policy, such as tax policy, or home appliances to the countryside subsidy measures and so on, rather than social security, low-cost housing and other fields of investment.