Tuesday, December 21, 2010

China to strive for an exception

 Zhou Qi Ren
not now easily relax currency. Economic growth is important, China's economic growth still has great potential, but can not loose money to promote the growth or capital growth, but should rely on other measures such as structural policies, institutional change, etc..
(1) basically the same, the inflation rate very different countries, indicating that the theory highly questionable. such as Russia, Iran is exporting oil, imported inflation should not exist, why the inflation rate is still high? Japan, South Korea 100% of imported oil, should be input significant impact of inflation, why a lower inflation rate instead? also emerging economies, Brazil and Mexico, why the inflation rate can be maintained at a relatively stable range? In addition, the imported inflation theory implies that inflation in China powerless, in addition to In many cases, the fixed exchange rate in developing countries create the necessary macroeconomic discipline, after all, a policy on the election, but encountered in China since 2003, the new advances in manufacturing productivity is significantly improved U.S. economy and weaker dollar. Fixed Passive exchange rate mechanism forcing the central bank issuing a large number of base money, not hedge too much money when clean, and not when the interest rate policy to curb, to accumulate in the body of the Chinese economy from soaring asset prices and higher inflation pressures. really Since last year, has finally burst into the CPI.
the problem is not only the RMB exchange rate RMB appreciation. This is similar to the 80's price reform. For the price was distorted, some people suggested that transfer prices, some people advocate put prices, which is the so-called is determined by the market. If the nominal exchange rate does not reflect the actual exchange rate, other aspects of the economy will finally go wrong. Therefore, the current appreciation of the renminbi is not a problem, but the RMB exchange rate formation mechanism, the problem is related to the monetary system.
immune to China to fight the Chinese have the conditions island. First, China has a huge potential domestic market and domestic demand. The so-called lack of domestic demand mainly because of the national income distribution. income distribution problem involves not only the relationship between people and people are more important between the state and the people relationship. residents from less than half the proportion of national income, the ratio is too low.
Second, China has the potential for sustained economic growth, certainly not in Japan in 1988. China's huge manufacturing capacity in the face of international market upgrade is vast, and turned to the same potential for the domestic services. Our services still in its early stages, people income, time costs, for China has great potential in the energy sector. oil prices so high, most should not be frightened of China. China's energy consumption 70% is coal. Finally, China has the potential and opportunities for food production. China has a lot of land not business is good, one of the reasons that food prices are not high enough. Conduction of international food prices due to Chinese farmers, yield potential will not be small.
(3) several things need to be careful, especially CPI trend is not so reliable. under the control of CPI price information revealed inadequate response to inflation is not real .6 months, the price of diesel per ton to 1,000 yuan, 1,000 yuan this The rise in oil prices is still being digested. Food test yet to come. now say that the summer grain harvest, but harvest is not necessarily the food supply, the farmers themselves can save up food.
so relaxing monetary or need careful . In the long run, money is a statutory non-convertible currency, as collateral not backed by precious metals, the only guarantee is the government's credibility, the credibility of the government to rely on the government to support self-discipline. forced to short-term pressure on the currency issue to loose loose go, would undermine the credibility of the government. China's broad money-GDP ratio is already the highest in the world. accumulated money supply will surely be an impact on the general price, which must not have illusions.
(4) rely on the promotion of economic growth
first objective recognition, is still a very high growth rate of .80 years I went to Beijing to participate in economic research, economic policy makers was that 6% growth has been quite high, more than 6% to stand . then become 8% growth target. and then later became 8% lower, will have to 11%, 12%, also known as less than 10% of economic growth they are very hard to accept.
but also to see that the economy is indeed slowing down, and slow down the uneven regional distribution. In the past growth of fierce regional and industry, especially the Pearl River Delta, Yangtze River Delta's export sector, the hardest hit. I think the key is to put growth and inflation pressures to consider a plate. subject to the burden of inflation control, rate of growth of the total points to be reduced because of past high speed, there is too much a part of that money results. in order to restrain inflation, money supply tight, that part of the growth rate down, is logical. So the policy direction is not insurance in the past, high growth, but should pay attention to slow down not too fast, to give the Chinese economy this fast The Giants rushing an adaptation process to the regions and industries particularly difficult to provide the necessary help.
current policy should be more flexible structure. such as the Sichuan earthquake reconstruction, with a responsible approach to their counterparts around the well. cost around 1% of revenue last year, to help their counterparts in monetary and fiscal reconstruction mm total did not increase, but greatly affected the reconstruction of resources.
As can be promoted through the reform of economic growth, the possibility of more large Space: A) import tax reduction, and promote more balanced growth. China can buy many things on the world, buy a better after the sale. Now many companies understand about this truth, but the high import taxes, import-related services can not keep up, to promote reform in these areas. B) financial services the private sector to ease the financing difficulties of SMEs. One reason is that loose monetary funding constraints of SMEs. But how many SMEs contribution by the big banks? small small and medium enterprises must rely on private financial institutions to provide services. C) stabilize the real estate market. the real estate industry must be the restructuring of prices and units, and then start the domestic market, domestic demand in order to become a dominant industry. D) open food exports. Now such a large spread of international and domestic food, Chinese food if you can export, we can make the difference not only in China but also create difficulties for the solution to contribute to world food image. and make money and make the name of a good thing, why not? with food stimulate the use of financial subsidies to farmers to be reliable than the more intensity is much greater. E) of mining rights to open tender. If a hundred years of mining rights and configured through the market, coupled with management to enhance, in the safe production can expansion of China under the conditions of supply of coal.
Therefore, the most important macro policy is not to loose money; to insist about the same time, a more flexible structure with policies and reform policies to ensure sustained and healthy growth. as long as the pressure in the short term relax in front of the currency, what deep-seated structural adjustment and reform are difficult to promote, because there is no power and pressure.
(This article CCER

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