Macro-control sword refers to excess capital

"More money" is also impressive in the latest April monthly financial performance report released by the central bank. It is believed that further central bank tightening may be on the way.

The monthly financial performance report released by the central bank showed that RMB loans increased by 317.2 billion yuan in April, an increase of 175 billion yuan year-on-year, the highest level in history for the same period.

The annual credit may exceed the standard

From January to April this year, my country's financial institutions added RMB 1,574 billion in new loans, which has used 62.8% of the annual control target. Shenyin Wanguo analyst Lu Wenlei believes that judging from the growth of money and credit in the first four months of this year, it is almost an inevitable trend that the scale of credit issuance and the growth rate of broad money M2 exceed the central bank's control target at the beginning of the year.

Yuan Gangming, a researcher at the Center for China and World Economics at Tsinghua University, told reporters that in general, the current economy is hot, but it has not crossed the line. "Because of the requirements for profitability and capital, banks' enthusiasm for lending remains unabated. If the loan is not well controlled, the warning line may be breached in the next stage."

Renminbi deposits at the end of April increased by 19.8% year-on-year and continued to run at a high level. Financial institutions have abundant sources of funds, which also increases the impulse of financial institutions to expand their assets. The report of Tianxiang Investment Consulting believes that the effect of the policy of raising the benchmark interest rate for RMB loans from April 28 remains to be seen. In particular, the increase in the interest rate of RMB loans is only aimed at loans, and there is no regulation of loose currency. The problem of excess liquidity in financial institutions has not eased, and even has a tendency to intensify. How to reduce liquidity under the dilemma of taking into account both domestic and foreign currency policies will be a major challenge to the central bank. A serious long-term challenge.

It is expected that the central bank's open market operations will not be easy in the future. The central bank may consider appropriately increasing the intensity of tightening policies including RMB appreciation, and whether to raise the loan interest rate again or appropriately raise the deposit reserve ratio will depend on the second quarter credit and Depends on investment control.

On May 15, the spokesperson of the central bank made it clear that the rapid growth of credit in the first quarter was the main reason for the rapid growth of credit in the first quarter. Accordingly, Lu Wenlei believes that the central bank's follow-up policy orientation can be roughly judged from two aspects.

First, by raising the reserve ratio to recover excess bank liquidity and restrain bank loans. However, it is unlikely that the central bank will raise the reserve ratio in the short term, mainly because: on the one hand, the central bank raised the loan interest rate at the end of April and at the same time began to adopt "window guidance" for commercial bank loans. The effect of this policy is at least 5%. month to start showing up. Therefore, the central bank will have a policy observation period and take further policies depending on the effect of the window guidance.

On the other hand, since the rate of appreciation of the RMB has accelerated again since the end of April, and the impact of the increase in the reserve ratio on liquidity will lead to an increase in market interest rates, which will undoubtedly stimulate the inflow of hot money and bring about an impact on the central bank's liquidity regulation. Therefore, from the perspective of domestic and foreign currency policy coordination, raising the reserve ratio in the short term is not an ideal choice.

Regulation is inevitable

Lu believes that compared with raising the reserve ratio, a more likely policy orientation of the central bank is to cooperate with other regulatory ministries and commissions to increase the regulation of investment projects, and to achieve control through regulation of investment The purpose of the demand for credit funds.

"If the economy is running hotter in the second quarter, it is basically certain to increase the reserve ratio, but it is more likely that the National Development and Reform Commission will issue regulatory policies." Zhou Cai, a macro analyst at the Xiangcai Research and Development Center Wei thinks.

Lu Wenlei noticed that in the economic data of the first quarter of this year, the rebound of real estate investment was not obvious. In contrast, the growth rate of local government investment projects and the proportion of investment projects have increased significantly Therefore, local government investment may be the main force behind the rebound in investment in the first quarter. From this point of view, increasing the regulation of local government investment and corresponding credit should be an effective means to control the rebound of investment and credit growth from the source, and recent measures show that macro regulation in this regard has already begun.

Recently, the five central ministries and commissions jointly called the suspension of "bundled loans". The so-called "bundled loan" refers to the combination of several infrastructure construction projects in a city or region with a wholly state-owned or investment-controlled urban construction investment company as the main body of the loan, and the repayment commitment issued by the government as the debt repayment guarantee. A way of financing a loan from a bank as a whole project.

If the effect of the policy is not obvious, the policy strength in this area may continue to increase.

Dr. Ba Shusong, Chief Economist of Ping An Securities and Deputy Director of the Financial Research Institute of the Development Research Center of the State Council, pointed out that significant excess liquidity has become a major challenge for current macroeconomic decision-making. Judging from the current situation, taking more measures by the central bank to solve the problem of excessive liquidity may still be the main direction of the next policy, and the measures taken may include continuing to raise interest rates, intensify open market operations, and increase the reserve ratio. and a more flexible exchange rate mechanism.

Interest rate and exchange rate move together

CICC research report favors RMB appreciation. CICC believes that my country's current liquidity continues to be excessive, and the trade surplus continues to grow rapidly, indicating that total demand is still strong. Under the current macroeconomic conditions, the possible short-term control policy is not to further tighten the currency, but to accelerate the appreciation of the RMB.

CICC said that although the growth rate of money and credit in April accelerated from the previous month, the possibility of further monetary tightening policies in the short term is relatively small due to the policy of raising loan interest rates.

“The best way to deal with excess liquidity is to raise interest rates and speed up the pace of RMB appreciation, and the balance of policy in the short term may be tilted towards accelerating RMB appreciation.” There are three reasons for CICC to hold this view.

First, it is not yet possible to judge whether the measures introduced at the end of April have produced the expected monetary tightening effect; second, the high growth in April may be partly due to commercial banks' surprises for profit motives Lending; third, accelerating the pace of RMB appreciation has a certain substitution effect on monetary tightening in controlling aggregate demand.

"The current macro-control has begun to enter a new dense area. On the premise of maintaining the continuity of the control policy, the macro-control will be slightly strengthened in the next stage, but generally it should not be greater than that in 2004." National Information Center report says.

Cannot say it's overheated yet

Will a new round of economic overheating triggered by out-of-control lending be similar to the one that started in late 2002 and continued into early 2004? Gong Fangxiong, chief economist at JP Morgan China, said the situation this time was fundamentally different. First, the current level of inflation is under control - less than 1%, compared to 5% last time, which means that prices are now leveling off. In the past, poor transportation and energy shortages led to higher prices, further exacerbating inflation. However, these bottlenecks have been alleviated. Gong Fangxiong still maintained his expectation that China's economic growth rate will reach 9.6% this year.

In the first quarter of this year, my country's GDP growth rebounded for the first time in a year and a half, 0.3 percentage points faster than the same period last year, which made macro-control more difficult. According to the report of the State Information Center, the data shows that since the reform and opening up 27 years ago, the average growth rate of my country's GDP is 9.6%. From 2003 to 2005, the average growth rate of my country's GDP was as high as 10%. From this point of view, although the economic growth in the first quarter of this year is somewhat fast, it is still within the potential growth range of China's economy, and it cannot be asserted that the economy has overheated.

On May 12, the National Bureau of Statistics announced that the April consumer price level (CPI) rose by 1.2% over the same month last year, 0.4 percentage points higher than the March data. Although a slight rise in the CPI can reduce deflation concerns, the April ex-factory price (PPI) announced the previous day was only 1.9% higher than the same month last year, the lowest level since November 2003.

PPI and CPI are two closely related data. PPI is considered to be the leading indicator of CPI. The low level of PPI means that CPI will decline in a few months. This has sparked concerns among economists about deflation.

Deflation or Inflation

Yuan Gangming, a researcher at the Center for China and World Economics at Tsinghua University, pointed out that the CPI index in the first quarter and April is more conducive to explaining the trend of deflation.

Yuan Gangming told reporters that the macro economy is already facing severe deflationary pressure. Because, the current situation of insufficient consumption and falling prices already exists. The problem now is that consumption is not going up. For a long time, the government's focus has been on investment. So far, the fundamental problem of expanding consumption has not been solved.

Deflation and inflation appear to be on the line. The CICC research report, the need to pay close attention to inflationary pressures.

From a microscopic point of view, the price reform of resources and public services will bring upward pressure on price trends. From a macroscopic point of view, the effect of the rapid growth of the money supply in the early stage will continue to appear. It is still difficult to rebound significantly, so it can be considered that the annual CPI rise is around 2%.

The State Information Center believes that, judging from the current trend, the inflow of bank funds into the real estate market is still accelerating. And the stronger the interdependence between banks and the real estate industry, the greater the damage to banks when the real estate cyclical market risk erupts, and the greater the pain it will bring to the development of the entire national economy in the future. Therefore, further adjustment of financial policy will inevitably be on the agenda.