Active fiscal policy and moderately easy monetary policy face three challenges

In response to the downward pressure of the economy, China has implemented a positive fiscal policy and moderately loose monetary policy. Half a year has passed, practice has proved that "double policy" is immediate and effective, will unswervingly implement.　　But at the same time, it is noted that in the process of implementing "double policy", it also highlights some difficulties and faces some challenges. The sign of private capital is not obvious as an important part of the "double policy", the government announces the implementation of the two-year investment plan of 4 trillion yuan.　　In addition to the progress, quality and effectiveness of these investments, it is more crucial to measure whether the plan is expected to be effective, and to what extent it can boost private investment. A statistic from the province of Zhejiang, a private capital, showed that the province's government-led infrastructure investment completed 86.6 billion yuan in the first 5 months of this year, an increase of 31.8% per cent, while private investment grew by only single-digit digits, to 8.2%.　　Zhejiang's situation is universal in the whole country. One of the most obvious features of the current investment data is the rapid increase in government investment. Of the total investment increase, government projects account for about half.　　This means that, behind the climax of the government project investment, the large private capital start signs are not clear, need to pry the target has not yet been achieved. "Because of the uncertain economic outlook, insufficient production orders, widespread overcapacity and declining industrial efficiency, private enterprises are investing cautiously, and the wait-and-see sentiment is quite common."　　"Guangdong, Zhejiang, Jiangsu and other fields in the investigation have found such phenomena." "These phenomena reveal that the current private capital is still not well into the field of social production, private capital has not much opportunity to make money, which is currently our fiscal and monetary policy must pay attention to."　　Yang Ruilong, dean of the School of Economics, Renmin University of China. The real economy needs more financial support at the beginning of this year, it was also considered "a very difficult task" when determining the growth target of 5 trillion yuan credit for the year. But the progress has been unexpected: in the first 5 months, the bank's new credit exceeded its full-year target.　　By the end of June, the new credit was close to 7 trillion yuan, twice times that of 2007.　　In stark contrast to the credit crunch in the world's major economies, ample credit supply effectively matched fiscal policy and played a pivotal role in the end of China's free fall and rapid stabilisation of the economy. Moderately loose monetary policy and active fiscal policy are confronted with the challenge of the spillover of credit funds.　　　　It is generally accepted that in the current economic stabilization and recovery, but the foundation is not stable, the external environment of China's economic development is still very serious, we must adhere to fiscal and monetary policy coherence, stability and sustainability, but at the same time to take effective measures to strengthen the supervision of capital flows.　　Macro-policy regulation highlights the dilemma of caution deflation is not over yet, and in recent times there has been a debate about the inflationary onslaught. Some economists are making bold predictions that there may beInflation。 The reason is that, in May, the CRB index, which generally reflected dynamic information on the world's main commodity prices, rose 14% sharply, the highest monthly gain since July 1974. June 1, the index rose 3.1% in a day, the biggest daily gain in two months. At the same time, they say, "The market is awash with so much money that it is understandable that inflation will soon hit."　　The BIS has warned that medium-term global inflation will be unavoidable if countries fail to adjust their current loose monetary policies in a timely manner. But more people think there is no immediate inflationary pressure. The facts seem to underpin this judgment. In recent months, China's consumer prices (CPI) and industrial factory Price (PPI) year-on-year "Double drop" situation has not eased. Data from the National Bureau of Statistics show that from 1 to May, raw materials, fuel, power purchase prices fell 8.2% year-on-year, the decline widened by 0.5%; CPI is still low.　　From the above, not only does not see the trace of inflation, even deflationary pressure is not completely lifted. (Comprehensive report of this newspaper)