Zhang Tingbin: China's Macroeconomic Regulation Has Become Unusually Tough.

　　 China's macroeconomic regulation and control Has become Unusually tough 。

In a short month, China's monetary policy suddenly contracted. In October 20th, the central bank raised interest rates by 0.25 percentage points; in November 10th, it raised the deposit reserve ratio by 0.5 percentage points; in November 19th, it raised the deposit reserve ratio by 0.5 percentage points again. So far, the deposit reserve ratio of large financial institutions has reached 18%, reaching the highest level in history.

The two tools and three monetary tightening in one month are quite rare and sharp. Its strong targeting, especially the two increase in the deposit reserve ratio within nine days, has never seen its counterattack on the rise in international commodity prices, especially the sharp rise in the price of 20.70,0.00,0.00%.

The increase in the reserve requirement ratio in November 10th coincided with the rebound in the US dollar index, while commodities, especially agricultural products, were rising at an extremely high speed. As a result, commodity prices fell sharply, and A shares were also reduced by 11.36%.

In this round of A shares and commodities rapid decline, 18~19 day, A shares and commodities, especially agricultural products prices have signs of rebound, and the 19 day followed by raising the deposit reserve ratio, it is to rebound the price of agricultural products "probe ball" severely beaten back, and then consolidate this round of counterattack International Commodities rising results.

In short, judging from the opportunity to raise the deposit reserve rate again on the 19 day, my last week's article "China can change the trend of global financial market for second times" has been further proved. This article writes: "the main objective of raising interest rates and raising the reserve requirement ratio again is the first surge in agricultural products. Over the past few months, the price of international agricultural products has risen sharply, which is challenging China's bottom line, and the second is the real estate bubble.

This article also points out that a new background of this round of regulation and control is "the keynote of the 12th Five-Year plan" established in the fifth Plenary Session of the 17th CPC Central Committee: economic restructuring will give more control to the regulation and control, because raising interest rates and raising the deposit reserve rate will speed up the survival of the fittest and promote structural adjustment. Now it seems that the time for the strong change of macroeconomic regulation is likely to be the plenary session.

"Structural adjustment" or "transformation of the mode of economic growth" has been proposed in China for more than 10 years, but it has never really been determined to implement it. I believe that this time is most likely to come true. Because the mechanism of social development has been formed.

The soaring prices of mineral products have already pushed the resource waste to the end of production. The soaring prices of agricultural products and real estate prices have raised the rigid cost of China's labor force, and have forced the competitiveness of cheap labor to end. The global financial crisis and the sovereign debt crisis have driven the extroverted economy into a dead end. If we do not turn the external demand into domestic demand and raise the efficiency of energy and resource utilization without reducing the basic cost of living, the affordability of China's economic production costs and the affordability of the public's living costs will be unsustainable.

In recent months, strong and sharp regulation may have indicated that the economic decision-making authorities have no longer allowed the "dilemma" to tie up their hands and feet, no longer worry about their gains and losses, and fire everywhere. The key is to control the price of agricultural products, and the second is to control property prices. These two goals are also in line with the fundamental interests of the general public. At the same time, they have come up with the momentum of control at any cost. Let's not talk about the final outcome of these regulatory actions. This strong style itself is uplifting and quite new.

At the beginning of this year, I was more worried that macroeconomic regulation and control would be unsteady. I thought that this sustained macroeconomic policy would run through the year 2010 and possibly extend to 2011. Now it seems that a new strong and targeted macroeconomic regulation and control period may have begun. At least this determination and will will be refreshing. This is an exhilarating change.

It is true that determination and willpower are the basic prerequisite for the success of macroeconomic regulation and control. Another important factor determining whether to succeed or not is the method - whether it is targeted and effective. Judging from the trend of domestic and foreign financial markets over the past 10 days, regulation has already achieved initial success, at least it is a first step. {page_break}

As the first wave of strong macroeconomic regulation and control, monetary tightening is necessary, but it is the "rule" of "rule", which can create a pressure environment that is more conducive to structural adjustment. However, it does not directly promote transformation and upgrading, nor does it do well. It will put more SMEs down and more workers lose their jobs and have serious side effects.

　　 After a temporary cure, we must keep abreast of the root causes. The fundamental solution to the "dilemma" lies in:

1., in the course of China's foreign economic exchanges, we must reverse the policy of serious redistribution of wealth redistribution (such as "export tax rebate" and massive purchases of US Treasury bonds), which is the key to changing external demand into domestic demand.

2. the transformation of the local government from the "all-around control operation type" to the "limited liability service type" is the fundamental way to reduce domestic taxes and fees, enrich the people and stimulate the creativity of the people.

3., while effectively supervising, we should liberate the high-end service industries such as small and medium sized finance, medical and education, change the current monopolized situation of state run government, introduce private competition, improve the level of service industry, and reduce social costs.

4., the public wealth of the mineral and land is also rich to the people, and also rich in society, which greatly reduces the burden of public life.

5. actively and effectively guide social resources to invest in high-tech, environmental protection and circular economy, and promote industrial upgrading.

Among them, the most important commanding point is to effectively protect the functions of power departments and local governments, serve the people instead of power and money, and compete with the people.

In short, if the problem of "Ben" is not solved, the positive role of "ending" monetary tightening will gradually decrease. The new force can not be spurted out. The old mode accelerates the embrittlement recession due to tightening, and the "side effects" of strong macroeconomic regulation may appear to be more positive. At this point, the strong regulation is regarded as "extreme" and attacked.

Such a strong regulation is a good start, but it can not change the rational redistribution of wealth, it is also rich in people, rich in society and rich in China. The task of permanent cure will be even more arduous.