At the end of March, China's currency accelerated

2022-08-24
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At the end of March, China's monetary tightening accelerated, GDP growth may be affected

at the end of March, China's monetary tightening accelerated, GDP growth may be affected

China Construction machinery information

Guide: the monetary data of China's encouraged differentiated developing countries at the end of March brought a little surprise: the degree of monetary tightening was higher than expected, which caused concern about the impact on the macro economy, especially GDP growth. Broad sense (M2) and narrow sense (M1) currencies increased by 12.1% and 5.4% respectively at the end of March. The former is still lower than 13% of this year's target, compared with the first two months

China's monetary data at the end of March brought a little surprise: the degree of monetary tightening was higher than expected, which raised concerns about the impact on the integration of macroeconomic components, especially GDP growth

the growth rates of broad (M2) and narrow (M1) currencies were 12.1% and 5.4% respectively at the end of March. The former was still lower than the target of 13% this year, which was significantly lower than about 13% in the first two months. The growth rate of M1 is much lower than that of M2, which has been the norm in recent months, reflecting the slowing demand for ball screws: the ball screws and trapezoidal screws currently used in electronic universal experimental machines. Foreign exchange reserves increased by $130billion in the first quarter to $3.95 trillion at the end of the quarter, indicating that funds are still flowing in, so capital withdrawal is not the main reason for monetary tightening

RMB loans increased by 3.01 trillion yuan in the first quarter, an increase of nearly 260billion yuan year-on-year, so the tightening is not severe

from the social financing data, the tightening is much stronger. The financing amount was 5.6 trillion yuan, nearly 10% less than 561.2 billion year-on-year. Among them, trust loans increased by 280.2 billion, a year-on-year decrease of 544.2 billion, undiscounted bank notes increased by 559.2 billion, a decrease of 111.4 billion, and corporate bonds increased by 384.6 billion, a decrease of 372.7 billion, reflecting the contraction of some financing channels under the suppression of shadow banking and the market credit crunch

except for bank credit, only entrusted loans and stock raising increased year-on-year. These situations show that monetary tightening is not only in terms of aggregate, but also in terms of structure; The two are going on synchronously. In terms of pace, it has been significantly tightened in the first two months, and it will be even stronger in March. In that month, the RMB loans of banks increased by 1.05 trillion yuan, a year-on-year decrease of 12.4 billion; Social financing is 2.07 trillion yuan, 479.4 billion less

this shows that the authorities have not been soft on tightening under the economic slowdown. In order to deleverage and reduce financial risks, they are not afraid of a short-term slowdown in growth. It can be seen that the authorities will not rush to stimulate the economy with monetary easing. On the other hand, the authorities can take measures that directly affect the real economy, such as the three measures previously introduced to stimulate it

this is different from the practice of developed countries such as Europe, America and Japan to stimulate by quantity, but the effect is much better. This also means that China can deleverage on the one hand and promote growth on the other. There is no contradiction between the two. Does it deny that China will become hard because of its high debt? Lu's "collapse theory" view

the adjustment of financing structure related to monetary tightening is also noteworthy, from which we can see the direction of the development of the financial industry in the future

first, the proportion of bank loans in local and foreign currencies accounted for more than 61% of social financing, up 9.5 percentage points year-on-year. In recent years, a batch of pests, such as pine wood nematodes, have gradually entered people's vision. Other loans such as entrustment, trust and undiscounted bank bills accounted for only nearly 28% of the total financing, especially the proportion of trust loans fell sharply by 8.4 percentage points to 5%. This may be due to the fact that under strengthened supervision, loans are "abandoned" and transferred from shadow banks to formal banks, and from off balance sheet businesses to on balance sheet businesses

in addition, the performance of direct financing through securities issuance varied: corporate bonds accounted for 6.9%, down 5.4 percentage points, while stock market fund-raising accounted for 1.7%, up 0.7 percentage points. The performance of debt declined due to default. On the contrary, the fund-raising in the stock market increased due to the re approval of IPO and the opening of preferred shares, but the proportion of direct financing is still small

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