How can China achieve its goal in the key year of supporting entity development with central bank gift package?

category:Finance
 How can China achieve its goal in the key year of supporting entity development with central bank gift package?


In the past 2019, high-quality development has been steadily promoted, and Chinas GDP is expected to be close to 100 trillion yuan and the per capita growth will reach 10000 US dollars. In 2020, China will build a moderately prosperous society in an all-round way and achieve the first centenary goal. 2020 is also the year of decisive battle for poverty alleviation.

Looking forward to 2020, the internal and external environment for Chinas economic growth is still grim. Wang Jun, chief economist of Zhongyuan bank and member of Academic Committee of China International Economic Exchange Center, told first finance and economics that Chinas economic growth is expected to be between 5.8% and 6% in 2020, which will achieve the economic goal of doubling in ten years as scheduled.

Globally, the performance of emerging economies in 2020 will be expected. In its latest world economic outlook, the International Monetary Fund said economic growth in emerging and developing markets is expected to pick up, rising from 3.9% in 2019 to 4.6% in 2020.

Its not a flood of water, reducing the standard and boosting market confidence

This time, the central bank announced a comprehensive reduction in standards, releasing about 800 billion yuan of long-term funds, and effectively increasing the sources of stable funds for financial institutions to support the real economy.

The person in charge of the central bank stressed that the reduction of the reserve to maintain a reasonable and sufficient liquidity is conducive to the realization of the growth of monetary credit and social financing scale in line with economic development, the creation of a suitable monetary and financial environment for high-quality development and supply side structural reform, and the use of market-oriented reform methods to dredge monetary policy transmission, which is conducive to stimulating the vitality of market entities and further giving play to the market in capital Decisive role in source allocation to support the development of real economy.

It is worth noting that on New Years day, the central bank announced that on December 27, 2019, the regular meeting of the monetary policy committee of the peoples Bank of China in the fourth quarter of 2019 (87th in total) was held in Beijing. It was proposed at the meeting that we should innovate and improve macro-control, adopt flexible and moderate monetary policy, use various monetary policy tools, maintain reasonable and sufficient liquidity, keep the growth rate of broad money m2 and social financing scale matching with the nominal growth rate of GDP, avoid flood irrigation, and maintain the overall stability of price level.

On the one hand, inflation CPI is under increasing pressure; on the other hand, it is under pressure of stable growth. In order to prevent the spread of inflation expectations, it is essential to maintain the pertinence and stability of monetary policy.

Wen bin, chief researcher of China Minsheng Bank, told the first financial reporter that the flexibility and moderation of monetary policy means that monetary policy should be considered prospectively according to the macroeconomic situation, inflation level and internal and external economic environment, so as to improve the foresight, flexibility and pertinence of monetary policy.

Of course, this comprehensive reduction does not mean that the orientation of sound monetary policy has changed. The central banks relevant head said that the reduction was a hedge against the cash supply before the Spring Festival, and the total liquidity of the banking system will remain basically stable, flexible and moderate, rather than flooding, which reflects the scientific and steady control of the counter cyclical adjustment of monetary policy, and the stable monetary policy orientation has not changed.

Previously, the central economic working conference proposed that monetary policy should reduce the financing cost of the real economy in 2020, and the reduction of the standard will help guide financial institutions to reduce the loan interest rate of the real economy under the new LPR (loan quotation) mechanism.

Wen Bin said that the overall reduction of 0.5 percentage points, in line with market expectations. In view of the fact that 600 billion yuan of reverse repo has been due in January, and the factors such as tax payment, issuance of special local government bonds, and cash demand during the Spring Festival, liquidity is under pressure. The 800 billion yuan released through the reduction of reserve can meet the above liquidity needs on the one hand, and on the other hand, the release of low-cost long-term funds is conducive to reducing the capital cost of banks and guiding banks to reduce the real economy financing Cost of capital. It is expected that the price of LPR in the new phase will decrease slightly on January 20, with the LPR of 4.1% in one year and 4.75% in more than five years.

In addition, Wen bin believes that this reduction is conducive to boosting investor market confidence and will bring benefits to the stock market. At the same time, the overall reduction of the standard will further play the role of counter cyclical adjustment of monetary policy tools, stabilize the current gradually stable macro-economy, and improve the performance of listed companies.

This reduction is in the general expectation of the institution, and for the A-share which has just stabilized at 3000 and is rebounding, it is undoubtedly a catalyst for the market.

It is of great significance to choose the reduction between the open market renewal and the reduction. As we can expect, there is room for a cut in interest rates. Li Huiyong, deputy general manager of Huabao fund, told first finance.

As for the capital market, the newly revised Securities Law just passed last week has straightened out a new way to reform the basic system of the capital market to the end, increased efforts to crack down on securities violations, comprehensively promoted the reform of the registration system, protected the interests of investors, and improved the channels of securities civil litigation.

Wang Bo, director of Zhongyuan Securities Research Institute, told the first financial reporter: to give full play to the direct financing channels, we must first optimize the ecological environment of the capital market, in order to create convenience for the financing of real enterprises and help the improvement of the economy. The fundamental of this reduction is still to support real economy financing. Although the path is different, the goal is very clear.

Shao Yu, chief economist of Orient Securities, also told reporters: at this point, releasing more than 800 billion yuan of long-term capital is undoubtedly a great benefit to the capital market, which has boosted market confidence at the beginning of the year.

Financial policy focuses on structural adjustment

Zhang Jun, chief economist of Morgan Stanley Huaxin securities, told the first finance and economics reporter that in view of the large uncertainty in the internal and external macro environment of the year, from the perspective of the continuity of macro policies and the effectiveness of expected management, the governments target value for GDP is expected to be adjusted to 6%.

On the one hand, the lag effect of the early counter cyclical policy and the periodic stabilization of the global economy will support the economy to a certain extent; on the other hand, too high or too low target setting is not conducive to the implementation of effective expected management. As the anchor of macro policy has turned to employment, as long as the employment is stable, a little higher or lower GDP data will not cause too much disturbance to the macro policy itself. Zhang Jun said.

Liu Zhe, vice president of Wanbo New Economic Research Institute, said in an interview with first finance and economics that there is still some pressure to slow down economic growth in 2020. At present, the real economy does face some difficulties in transformation, but we need to recognize that these problems are structural and cyclical. The weak growth of traditional kinetic energy and the continuous high-speed growth of new kinetic energy are very significant transformation characteristics in the key period of the transformation of new and old kinetic energy.

According to the analysis of Cheng Shi, chief economist and general manager of ICBC international, Chinas macro policies will have more room to move and allow counter cyclical regulation and control to work more flexibly at the right time. In 2020, Chinas economy will achieve overall stability in small fluctuations.

In terms of fiscal policy, the central economic working conference held at the end of 2019 continued to put forward positive fiscal policy and stable monetary policy, but more emphasis was placed on improving quality and efficiency, paying more attention to structural adjustment, resolutely reducing general expenditure, doing a good job in key areas, and supporting grass-roots workers to ensure wages, transport and basic peoples livelihood.

This expression shows that the financial policy pays more attention to the improvement of quality and efficiency, and resolutely does not engage in flood irrigation. Experts generally predict that the deficit rate may slightly increase on the basis of 2.8%, but it will not exceed 3%. The special bonds of local governments not included in the fiscal deficit are expected to rise to more than 3 trillion yuan in 2020 on the scale of 2.15 trillion yuan in 2019, which will be used to stabilize investment and make up for weaknesses.

After the unprecedented 2 trillion yuan tax cut and fee reduction policy last year, what new move of the tax cut and fee reduction policy in 2020 has attracted market attention. In terms of tax reduction and fee reduction, the central economic working conference made it clear that the policy of tax reduction and fee reduction should be implemented, the cost of electricity, gas and logistics should be reduced, and the disposal of zombie enterprises should be promoted in an orderly manner. The general level of tariff should be reduced. We need to consolidate and expand the effectiveness of tax reduction and fee reduction, vigorously optimize the structure of fiscal expenditure, further ease the difficulty of financing and the high cost of financing, and take multiple measures to keep the employment situation stable.

Liu Jianwen, a professor of Peking University, analyzed first finance and economics. In 2020, new large-scale tax and fee reduction policies should not be introduced, but mainly to summarize and evaluate the effect of existing tax and fee reduction policies, and then to study how to adjust and optimize the existing policies according to the effect of policy implementation and future economic situation. At present, the legislation of value-added tax and consumption tax has not involved in the change of tax burden, which also confirms that there may not be new tax reduction measures for these taxes in the short term.

Zhang Jun also believes that in view of the slowdown in the growth of fiscal revenue, it is difficult for the central government to continue to maintain both the increase of expenditure and the reduction of tax. The focus of active fiscal policy still needs to be implemented in the investment of special bonds and infrastructure construction.

With the Ministry of Finance allocating 1 trillion yuan of local government special bonds to provinces and cities in 2020, the issuance of special bonds will be launched in January. The Ministry of finance requires all localities to implement the quota of special bonds to specific projects as soon as possible according to the regulations, do a good job in the issuance and use of special bonds, issue and use them early, so as to ensure the effective use at the beginning of the year, ensure the formation of physical workload, and form an effective pull on the economy as soon as possible.

The national financial work conference, held from December 26 to 27, 2019, stressed that in 2020, positive financial policies should be vigorously improved in quality and efficiency, pay more attention to structural adjustment, and work from both quality and quantity. At the same time, we should focus on the coordination of fiscal policy and monetary policy, strengthen coordination with employment, consumption, investment, industry and regional policies, and improve the foresight, pertinence and effectiveness of macro-control.

(Qian Xiaoyan, Guo Luqing and Wei Zhongyuan, the first financial reporter, also contributed to this article)

Source: First Financial Editor: Guo Chenqi, nbj9931