亚洲精品久久久久久一区二区_99re热久久这里只有精品34_久久免费高清视频_一区二区三区不卡在线视频

 

How China can stimulate stable growth

By Xiao Geng
0 Comment(s)Print E-mail China Daily, May 29, 2012
Adjust font size:

Should the Chinese authorities launch another economic stimulus program, in light of a slowing domestic economy and volatile financial, economic and social conditions in Europe and elsewhere? My answer is "yes", but in a way that promotes long-term growth with fewer bubbles and less inequality. To this end, the following mutually-reinforcing and complementary policy adjustments are recommended.

First, we need a more aggressive lowering of the reserve requirement ratio for banks than has happened so far. This would provide enough liquidity and credit for private enterprises while keeping interest rates in the unofficial markets at lower levels that are less punishing for smaller players in the real economy.

Second, when lowering the reserve requirement ratio, the central bank should also consider raising deposit rates aggressively over a period of time, so that they align more closely with the estimated medium and long-term inflation rate. Inevitably, such a change would drive up the cost of borrowing for State-owned enterprises and local government projects. But the increased lending rate would still be much lower than the interest rates charged in unofficial credit markets, such as those in Wenzhou. This would bring relief to the private sector and stimulate borrowing for small business growth.

In China's particular context, raising interest rates in the formal banking system is not intended to slow economic growth. Rather, it takes aim at entrenched inflation stemming from deeper structural problems and imbalances in China's economy which left unaddressed will continue for decades more.

These structural problems include over-capacity and excessive supply in sectors such as infrastructure, which can be traced back to debt rapidly taken on by State-owned enterprises and local governments. Higher interest rates would bolster market discipline, deterring excessive investment in over-capacity and encouraging investment in higher-return projects for which there is real demand.

Without higher nominal interest rates, a negative real interest rate will solidify under China's "structural inflation" regime, leading to all sorts of speculative bubbles. The raising of interest rates in the formal banking sector would also offset the expansionary effects of lowering the reserve requirement ratio. In tandem, these two policies would rationalize the price of capital without stunting growth. They would also send a clear signal to the market that policymakers are determined to change China's growth model from one of quantitative expansion to one of quality where growth is inclusive and more sustainable.

A third recommendation to policymakers is to stop implementing so many temporary and ad hoc administrative restrictions on prices, demand, lending and investment, which include many complicated restrictions on the purchasing of real estate by non-residents.

These restrictions fragment the market and reduce both demand and supply. Given China's rapid urbanization, such reduction in the supply of housing will only drive up house prices in the future. It is better to use market tools, such as higher interest rates, higher down payments and transaction taxes, than administrative tools, to manage the real estate market.

Moreover, to moderate property prices, it is essential to maintain an ample supply. A key related question is where to build these new houses so that they do not become "ghost towns" after speculators have departed. This requires better long-term planning and regulation and management of systemic risks through stable and lasting policies.

Fourth, to deal with a high-interest-rate environment in the future, China needs a new macro management tool: fiscal subsidies on interest payments for specific public projects and disadvantaged groups. In the current low-interest-rate environment, all investment projects that receive credit from the formal credit market are heavily subsidized through low deposit interest rates. This is regardless of whether their real return on capital is high or not. In effect, it is to the detriment of savers, who, ironically are usually too poor to secure mortgages to buy a home.

On the other hand, entrepreneurs with good projects promising high returns may find they have no alternative than to borrow from the informal credit market, at punitively high rates. These shadowy activities encourage corruption, over-investment, unfair access to credit, and investment bubbles. Once bubbles emerge, policymakers react by placing restrictions and regulations on those activities with abnormal profits. This usually has little impact on the larger players, who can continue to access cheap credit, often for speculative purposes. But it hurts the small and medium-sized enterprises who create jobs in the real economy.

We need to turn this unfair and highly-distorted regime upside-down by raising all interest rates to true market levels. In other words, we need to narrow the gap between the cost of capital in the formal and informal credit markets, so as to allow market-equilibrium interest rates to dominate the majority of asset-allocation decisions.

Then, for a few strategically-important public projects and socially-disadvantaged groups, the government should provide fiscal subsidies on their interest payments under clear and transparent means-tested rules.

Finally, I would recommend that the government develop a regulatory system for dealing with expected interest-rate gaps between China and the advanced economies such as the United States, Europe, and Japan.

Such a system would control inflows of "hot money" through regulation and taxes, while encouraging orderly cross-border capital flows through a modern regulatory system based on regulatory filing and registration, instead of the bureaucratic application-approval process. Legitimate cross-border capital flows should be allowed, as long as they are registered and have real non-speculative business backing. This system should make China's capital account much more convertible through formal banking channels, while punishing speculative arbitrage on the cross-border interest rate gap.

Moreover, as interest rates are raised, bubbles in the real estate and stock markets will disappear. Markets with higher rates of return on capital and lower volatility will attract real investors, rather than speculators.

Returns on investment in the real economy remain much higher in China than in mature economies, and given these differences, it is important for China to monitor and regulate closely cross-border capital flows. China can thus ensure the risk-adjusted return inside its domestic financial markets is higher and compatible across bank deposits, stocks, bonds, and direct investment.

To summarize, given both global and domestic macroeconomic conditions, it is important for China to keep its eye on the big picture of global transformation in the real and financial sectors. Distortions in global financial markets are likely to continue for many years, with the price of capital and scarcity of capital in the real economy mismatched in many countries due to political issues and governance constraints.

To maintain productivity growth, economic efficiency and social fairness, China needs to rationalize its financial markets by ensuring that the price of capital, as expressed through real interest rates, is consistent with its scarcity and value in the real economy. This is the most reliable way for China to achieve macro and financial stability and sustainable growth.

In pursuing such a path, it will be essential for China's policymakers to adopt a systemic, holistic, global-local, and business-relevant approach to its macroeconomic management challenges.

The author is director of Research and a senior fellow at the Fung Global Institute.

Print E-mail Bookmark and Share

Go to Forum >>0 Comment(s)

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from China.org.cnMobileRSSNewsletter
亚洲精品久久久久久一区二区_99re热久久这里只有精品34_久久免费高清视频_一区二区三区不卡在线视频
欧美在线www| 亚洲欧洲三级电影| 亚洲国产精品电影在线观看| 国产日韩在线看片| 国产欧美一区二区三区久久| 欧美午夜电影在线| 欧美日韩三区| 欧美视频1区| 欧美视频第二页| 欧美三级欧美一级| 国产精品对白刺激久久久| 欧美日韩在线播放三区| 欧美日韩精品综合| 欧美三级午夜理伦三级中文幕| 欧美日韩www| 欧美深夜影院| 国产精品男女猛烈高潮激情| 国产精品视频999| 国产九九视频一区二区三区| 国产美女精品免费电影| 国产日韩欧美一区| 国产私拍一区| 影音先锋另类| 亚洲全部视频| 一区二区欧美精品| 亚洲伊人第一页| 欧美有码在线观看视频| 亚洲国产精品一区二区第一页| 亚洲青色在线| 亚洲色图自拍| 小黄鸭精品aⅴ导航网站入口 | 久久国产高清| 久久视频免费观看| 欧美激情亚洲精品| 欧美性天天影院| 国产欧美日韩一区二区三区在线观看| 国产午夜精品理论片a级大结局| 狠狠爱综合网| 亚洲精品午夜| 亚洲欧美日韩精品| 亚洲国产精品传媒在线观看| 亚洲欧洲另类国产综合| 中文亚洲视频在线| 性欧美超级视频| 另类激情亚洲| 欧美午夜理伦三级在线观看| 国产一区二区精品久久91| 亚洲国产成人高清精品| 一本色道久久综合亚洲精品小说| 亚洲欧美日韩国产另类专区| 91久久国产综合久久| 亚洲视频在线观看免费| 久久久久久久久久久久久女国产乱| 嫩模写真一区二区三区三州| 欧美网站在线| 一色屋精品视频在线看| 一区二区三区www| 久久国产黑丝| 亚洲一二三区在线观看| 久久久久久久久久久久久女国产乱| 欧美剧在线免费观看网站| 国产精品一区=区| 亚洲第一区色| 亚洲欧美另类在线观看| 亚洲精品在线一区二区| 欧美一二三区精品| 欧美激情bt| 国产精品日韩一区二区三区| 亚洲国产成人在线视频| 亚洲欧美激情视频| 一区二区毛片| 久久综合图片| 国产精品日本欧美一区二区三区| 亚洲国产va精品久久久不卡综合| 亚洲欧美影院| 亚洲性视频网址| 欧美成人激情在线| 国产欧美一区二区色老头| 亚洲精品视频在线看| 亚洲高清不卡在线观看| 亚洲欧美日韩一区二区三区在线观看| 免费在线观看一区二区| 国产日本欧美在线观看| 亚洲最新视频在线| 亚洲黄色一区| 久久精品视频在线| 欧美日韩视频在线一区二区| 亚洲成色www8888| 欧美一二三区精品| 亚洲欧美精品一区| 欧美精选午夜久久久乱码6080| 狠狠综合久久| 香蕉成人伊视频在线观看| 亚洲一区二区三区精品视频| 欧美精品1区2区3区| 在线观看视频一区二区欧美日韩| 欧美一级片在线播放| 欧美三级特黄| 伊伊综合在线| 99re成人精品视频| 亚洲大胆视频| 欧美一区二区三区在线视频 | 性欧美激情精品| 亚洲一区三区视频在线观看| 欧美激情综合亚洲一二区| 一区在线视频观看| 久久精品噜噜噜成人av农村| 久久99伊人| 国产精品一区二区女厕厕| 亚洲自拍三区| 午夜在线成人av| 国产精品美女主播在线观看纯欲| 夜夜嗨一区二区三区| 中文日韩在线视频| 欧美三区不卡| 一区二区三区高清在线| 亚洲手机在线| 欧美视频不卡| 亚洲私人影院| 午夜精品www| 国产精品免费一区二区三区在线观看| 亚洲午夜羞羞片| 午夜精品一区二区三区在线播放| 国产精品久久久久久久午夜| 亚洲午夜三级在线| 欧美在线视频观看| 国产一区二区三区精品欧美日韩一区二区三区 | 鲁大师成人一区二区三区| 雨宫琴音一区二区在线| 亚洲东热激情| 欧美成人亚洲成人| 亚洲精品久久| 亚洲自拍偷拍色片视频| 国产精品视频网址| 欧美亚洲免费| 久久综合久久综合久久| 亚洲国产精品成人综合色在线婷婷 | 欧美人在线观看| 一区二区三区久久| 欧美一级淫片播放口| 国产视频久久久久| 久久精品一区二区| 欧美成人午夜影院| 在线性视频日韩欧美| 性欧美video另类hd性玩具| 国产一级久久| 亚洲人成网站色ww在线| 欧美日韩视频在线| 亚洲欧美视频在线| 奶水喷射视频一区| 99re热精品| 久久精品国产第一区二区三区最新章节| 黄色国产精品一区二区三区| 亚洲乱码一区二区| 欧美午夜精品久久久久久孕妇| 午夜伦欧美伦电影理论片| 美女视频黄免费的久久| 一区二区电影免费在线观看| 久久精品国产在热久久| 91久久精品日日躁夜夜躁国产| 99国产精品国产精品毛片| 国产精品色网| 亚洲精品色图| 国产精品视频内| 亚洲日本黄色| 国产精品免费网站| 亚洲欧洲视频在线| 国产精品免费网站| 亚洲欧洲日本专区| 国产精品日韩一区二区三区| 91久久国产精品91久久性色| 国产精品久久国产三级国电话系列 | 亚洲免费av电影| 久久久99免费视频| 亚洲欧洲在线播放| 久久精品首页| 夜夜爽99久久国产综合精品女不卡| 久久久www| 一区二区三区精品国产| 毛片av中文字幕一区二区| 亚洲色图在线视频| 蜜臀av在线播放一区二区三区| 亚洲午夜一级| 欧美久久视频| 亚洲高清视频在线观看| 国产精品久久一卡二卡| 亚洲日本黄色| 国内自拍一区| 亚洲欧美日韩中文视频| 亚洲激情视频在线播放| 久久久久九九九| 亚洲午夜未删减在线观看| 欧美理论大片| 亚洲激情欧美| 国产欧美在线播放| 亚洲女优在线| 亚洲免费成人av电影| 欧美bbbxxxxx| 亚洲电影在线免费观看| 国产一区二区成人久久免费影院|