Monetary policy should care about the stock market

"China Economic Weekly" chief commentator Niu Wenxin

Since this year, China's fiscal policy has expanded unprecedentedly. Such efforts will undoubtedly have a huge positive impact on the Chinese economy in the second half of the year. But the question is: what should I do if the monetary policy should be?

One of the troublesome things is that due to the skyrocketing price of commodities, the probability of rising input prices in the second half of the year is very high, and now there are more clear expectations. How to do? Should we stop currency looseness? Even tightening? In fact, the relevant voice seems to be hidden. For example, at a recent financial annual meeting, a former financial executive is borrowing expected management issues, advocating that "China needs to implement more positive and accurate fiscal policies, and a stable monetary policy must be flexible and moderate."

What does "stay in room" mean? Vague language. From the perspective of the practice of long -term macroeconomic policies, in the proposition of China's various policies, the problems existing are to treat fiscal and monetary policies as "two skin", each saying that it has appeared in 2010, so that in 2010 combination. As a result, private enterprises have to rely on the capital chain of the usury to be the capital chain, and the economy is out of reality. This lesson is profound.

How to avoid the situation of "one step on the accelerator and the brakes" again in the macroeconomic policy? In my opinion, macroeconomic policies should adhere to systemic concepts to avoid the phenomenon of "two skin".

In fact, on March 16, 2022, the State Council's Financial Commission held a meeting to give four major policies: First, the relevant departments should effectively take on their own duties, actively introduce policies for the market, and introduce a shrinkage policy carefully. Second, all policies that have a significant impact on the capital market should coordinate with the financial management department in advance to maintain the stability and consistency of policy expectations. Third, the State Council's Financial Commission will increase coordination and communication, and hold accountability if necessary. Financial institutions must start from the overall situation and firmly support the development of the real economy. Long -term institutional investors are welcome to increase the shareholding ratio. Fourth, maintain the long -term situation of China's healthy development and jointly maintain the stable development of the capital market.

Obviously, the above policy proves that the decision -making level is concerned about the stock market.

Not just the stock market, for the economy, the so -called "input inflation" is not a problem with Chinese currency. The fact is that in the past 10 years, China has never invested currency too much, and the current price rise is by no means a currency issue in China, but the currency issue of the dollar. Therefore, no matter how the Chinese monetary policy is tightened, it is impossible to eliminate the price consequences brought by the US dollar to the world. If you have to use the RMB monetary policy to govern the mistakes made by the dollar, it is tantamount to "we are sick of we take medicine."

Therefore, we must not engage in large water irrigation, but it is no longer possible to engage in drought policies. In particular, we must resolutely prevent "tightening the currency policy to cope with rising input prices." "Management and guidance expectations, as an important tool for the current steady growth, need to further play a further role in boosting demand expectations, improving supply expectations, weakening inflation expectations, and reducing the expected of the deterioration of the trade environment." This is an appreciation of the law At the same time, it is necessary to pay attention to the severity of the expected management. As far as the current situation is concerned, it is important to boost demand expectations. It is important to improve supply expectations. Weakening inflation expectations is not to suppress demand, but to improve supply. For example, the National Development and Reform Commission has recently guided coal and pig prices.

The great cause of the country, governance requires fineness. We want to change the extensive practices of regulating the book in the past, and take the establishment of the logical framework of the Chinese economy itself as a priority, and put into practice.

(This article published in "China Economic Weekly", No. 13, 2022)

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