Goldman Sachs Fred VI: Inflation is a potential risk monetary policy does not have to immediately tighten

Every reporter Xuquizong from Beijing July 16, with the National Bureau of Statistics announced China's macroeconomic semi-annual report, China's economic recovery has become a consensus. But the foundation of the recovery is still not strong and is a consensus.　　The authoritative experts interviewed by the Daily economic news said that China's macro-control in the second half will be based on the results achieved in the first half of the year, fine-tuning, refinement and more effective implementation.　　From today, this newspaper launched the "China Macro-economic year observation," invited a number of economists to comment on the first half of the economic operation of the outstanding problems, and the second half of the policy adjustments put forward recommendations.　　According to the National Bureau of Statistics recently released the first half of the economic data report, Goldman Sachs (Asia) Limited liability company managing director Hu said that China's economic recovery has been effective, but in the second half of the year and the next year, private investment should be replaced by government investment.　　SMEs did not benefit from the stimulus policy NBD: The National Bureau of Statistics 16th released the China Economy semi-annual report, how do you think of this semi-annual report? Fred Six: From the first half of the macroeconomic data, China's economy reflects a steady recovery of good momentum. GDP growth in the second quarter accelerated further than in the first quarter, suggesting a series of government policies have begun to bear fruit since last autumn.　　In particular, the 4 trillion fiscal stimulus and easy monetary and credit policies prompted a big rebound in the economy.　　NBD: What do you think is wrong with China's economic recovery on the surface of the economic upturn? Fred VI: I think there are still two very big uncertainties in the economic operation, that is, the government's fiscal to stimulate economic growth, can it continue? Can fiscal stimulus be replaced by private investment?　　The rapid transition of these two factors will have a direct impact on the sustainability of China's economic recovery. In my opinion, the authorities should also be reminded of the potential and three negative factors that need to be taken into consideration: first, the demand structure, mainly infrastructure, including fixed investment and consumption, has not reached the expected growth rate. The reason is that the first half of the fixed investment in the largest proportion of government investment, and private investment is relatively small.　　Benefiting from large state-owned enterprises, private enterprises and small and medium-sized enterprises benefited very little. Second, the main theme of China's economy is to promote demand-oriented.　　Compared with some developed markets in the United States and Europe, the current troubles are not simply the problem of insufficient demand, but also the weak structure. Third, fiscal policy and credit mainly support infrastructure construction and large state-owned enterprises, the financing difficulties of SMEs are still continuing.　　The experience of the past more than 20 years shows that small and medium-sized enterprises are the main source of employment creation, this year's employment situation is grim, not simply the international financial crisis and the decline in exports led to the core of the problem is the SME financing channel is still not smooth, also did not benefit from fiscal stimulus and credit expansion, the current increase in employment lags behind GDP growth.　　Monetary policy does not have to be NBD immediately: for the first half of the year's growth in credit for financial institutions, many have argued that monetary policy should be tightened appropriately, what do you think? Fred VI: GlobalEconomic environment is still relatively fragile, albeit in a steady direction.　　China's foreign demand has not changed, in which case it is necessary to maintain a loose monetary policy. But the surge in credit expansion and loose monetary expansion in the first half of the year should pay close attention to the signs of inflation. Inflation is a potential risk from the June CPI and PPI data. Monetary policy does not need to be tightened immediately, and once tightened, it is possible to nip the economic recovery in the bud. At the same time, monetary policy should pay special attention to the risk of asset bubbles, as well as real estate and stock markets. The risk of asset bubbles is more serious than price inflation.　　This is also a thorny issue that should be of concern to the monetary authorities. As for the long-term financing difficulties of SMEs, I think the most important thing is to carry out financial reform.　　The concrete approach is for the central government and local governments to develop a guarantee support scheme for SMEs, with the Government providing a certain range of security insurance platforms with a part of the financial system.　　NBD: How should China's economic road be developed in the future and whether it needs to adjust its existing development model? Fred VI: The global financial crisis has provided China with a lot of useful lessons to learn from. But it does not suggest that China needs to change its economic development model.　　The history of the past 30 years has proved that market economy is the only way for China to rise and prosper. This financial crisis has not changed the fundamental fact that the market economy is the most efficient, most productive and dynamic economic system in human history. China should unswervingly consolidate and perfect the initial market economy system that has been formed, so as to exert greater potential to reduce the gap between the United States and Europe and Japan.