Ha Jiming: the current round of low interest rates in 1998 than the 1.98 percent rate cut cycle lower
Nov. 26, following the 4 trillion fiscal stimulus program, the Chinese government and then a heavy, so as to withstand severe economic situation.
The central bank announced that from November 27, 2008, the financial institutions to cut one-year yuan loans to keep the benchmark interest rate 1.08 percentage points in all other grades of the deposit and loan period of interest rate adjusted accordingly. At the same time, the central bank reduced refinancing and rediscount rate, and so on.
In addition, from December 5, 2008, the Industrial and Commercial Bank lowered, the Agricultural Bank, Bank of China, Construction Bank, Bank of Communications, the postal savings bank deposits and other large financial institutions RMB deposit reserve ratio by 1 percentage point reduction from small and medium-sized deposits Financial institutions RMB deposit reserve ratio by 2 percentage points. Wenchuan continue to earthquake-stricken areas and rural financial institutions in the implementation of the preferential deposit reserve ratio.
The Chinese government does not seem to be supported by the end of the economic policy. "Then there will be follow-up of a series of policy initiatives to follow up." 6:00 in the evening on the same day, our reporter to call the relevant officials in decision-making, has been such a reply.
CICC macroeconomic research team in this week released a "security concern in recent eight," the report stressed that the economy will be relatively steady growth as a top priority, in order to "protect eight" may continue to stimulate the introduction of the policy.
Interest rate policy should be one step?
The unprecedented intensity of the move to cut interest rates, the State Council Development Research Center, Xia Bin, director of the Institute of Finance has not shown any accident, "should be a matter of interest to the drop down to promote confidence." Xia Bin is a strong cut in the near future has been upheld Point of view.
Beijing University economist Song Guoqing, also holds a similar viewpoint. He also made clear the central bank to cut interest rates should be more bold, regulation and control departments should change the traditional cycle of interest rate increases way of thinking, the rate of inflation in a rapidly changing environment, interest rates should be adjusted as much as possible in one step.
Given the current economic situation may also severe than in 1998, CICC Ha Jiming, chief economist expects the current round of low interest rates in 1998 than the 1.98 percent rate cut cycle (one-year deposits) lower over the next 1 year Will cut interest rates 108 basis points, and reserve ratio will be down 250-450 basis points.
The central bank's rate cut significantly, Song Guoqing also told reporters that there continued to fall.
Song Guoqing pointed out that in 2008 China's macro-economic situation changes very fast in the first quarter of serious inflation pressure, to the third quarter also showed signs of deflation, the inflation rate to deal with this rapidly changing circumstances, the interest rate should be adjusted quickly.
In this regard, Ha Jiming have the same concern: to accelerate the economic downturn caused by overcapacity and pressure on the unemployed, as well as the global commodity price bubble burst, making next two years after the PPI and CPI non-food deflation may occur.
Song Guoqing of the worry is that if the small fine-tuning, 1998, the annual interest rate adjustment may be caused by the lag again. It is 1998, the country lags behind the rate adjustment, which led to real interest rates than the corporate rate of return on investment, enterprises are reluctant to invest, ultimately resulted in aggregate demand remains in the doldrums.
In view of this, it is necessary to stimulate economic growth, the need to speed up the development of direct financing channels, so that enterprises can find the funds to the market, such as bonds issued, listing the medium-term notes, short-term financing, such as coupons, and more inclined to small and medium enterprises, development Private equity fund.
Geometric rate cut to stimulate the real estate?
China's real estate industry of the importance of economic self-evident,'s rate cut on the verge of a crisis can save the edge of the property market?
"Rate cut is certainly a positive, but may not be able to reverse the current atmosphere of the property market." Financial research fellow at the Chinese Academy of Social Sciences Yin Zhongli told reporters that the current price level, can afford to buy the family house in the 2006-2007 annual average Buyers have once again cut interest rates although the level of housing prices could decline 10%, but the family can not afford to buy a house, house prices are still high threshold.
But the rate cut on the real estate consumption brought about by the stimulus for all to see, Qilu Securities, an analytical report pointed out that a total of 1,000,000 houses, down 20% after the rate cut so that it can repay their loans Cost savings 177,000 yuan, accounting for 17.78 percent of the total housing.
Yin Zhongli that the rate cut will have a substantial effective demand for certain.
However, the current real estate market does not lie in the deserted main reason for the rate cut, but those who buy a house, the developer of the market as a whole is expected to pessimism. The main buyers for the future of the unstable income and housing prices decline, and other factors, the suspension of the planned purchase. The developers of the future is not optimistic about the housing market, to adjust the pace of development, slowing down the pace of project development.
For developers, the lower the interest rate of 1% of its cost of capital to reduce significantly the role, but the current developers, the most important thing is cash flow, rather than the cost of capital.
One developer told reporters frankly, as the 2006-2007 period, rising house prices, bank interest rate increase in a row did not stop the enthusiasm of real estate, the current real estate market continued to take the cold, straight reversal simply can not cut prices.
Yin Zhongli of the view that successive moves to cut interest rates aimed at long-term deposits will be squeezed out of the system, and enhance market liquidity. These capital flows to the market, whether as a new real estate investment opportunities, "hunters"? Yin Zhongli of the view that such large-scale real estate investment momentum has not yet formed.
Canoe difficult to hold monetary policy
As China's economic difficulties, especially in October, the economic indicators suggesting the economy continues to decline sharply cut interest rates in the market expected. In this regard, Ha Jiming that, in general, a more significant positive impact. Tsinghua University economist Li Daokui then told reporters that the rate cut for two purposes, first, to enhance confidence in the economy as a whole, to reduce investment costs, in particular, to enhance confidence in listed companies, lower interest costs, and the other is actively cooperate with the Fiscal stimulus program, "because the fiscal stimulus in at least half of the money from the banks, so they lowered the cost."
As the stimulus program will work, Li Daokui to judge that China's economic growth rate next year at 9% -9.5%, "the problem of employment is the key."
However, Peking University, Zhou Qi Ren economists held that the current difficulties rather than on monetary policy alone can solve. China to relax monetary policy, the United States and Europe can not revitalize the market. He said that domestic production and investment gradually weakening the currency is not a factor in the decision, monetary policy alone should be sufficient to "double weak domestic demand and external demand".
Zhou Qi Ren of the view that monetary policy response to deflation in there, but for the start of economic growth will not be such a big role. In particular, in the long run, China's central bank did not like the U.S. Federal Reserve made money all over the world.
"Can not increase the budget deficit under the premise of the expansion of aggregate demand." Song Guoqing of the view that the fiscal policy is concerned, the Ministry of Finance could be considered the owner of state-owned enterprises on the basis of the status and power, in one way or another, through state-owned enterprises, the profits will be up close and At the same time, measures to reduce taxes.
In response, Zhou Qi Ren said, adding that the profits of state-owned enterprises instead of the Ministry of Finance to set a number of money will be able to "tune" get up. "Without substantial reform of the monopoly profits is difficult to get up." As a result, the expansion of access to increase competition and continue to push forward administrative monopoly on the sector of the market reform is essential. China such a high savings and investment in non-wang, and a lot of openness in the field of high returns are not related.
The Chinese Academy of Social Sciences Institute of World Economics and Politics of the International Institute for Monetary Research Fellow Zhang Bin said, "people who need the most urgent need for private sector investment into the most pressing areas of reform, including health care, education, logistics, communications, financial And many other service industries. "
Nov. 26, following the 4 trillion fiscal stimulus program, the Chinese government and then a heavy, so as to withstand severe economic situation.
The central bank announced that from November 27, 2008, the financial institutions to cut one-year yuan loans to keep the benchmark interest rate 1.08 percentage points in all other grades of the deposit and loan period of interest rate adjusted accordingly. At the same time, the central bank reduced refinancing and rediscount rate, and so on.
In addition, from December 5, 2008, the Industrial and Commercial Bank lowered, the Agricultural Bank, Bank of China, Construction Bank, Bank of Communications, the postal savings bank deposits and other large financial institutions RMB deposit reserve ratio by 1 percentage point reduction from small and medium-sized deposits Financial institutions RMB deposit reserve ratio by 2 percentage points. Wenchuan continue to earthquake-stricken areas and rural financial institutions in the implementation of the preferential deposit reserve ratio.
The Chinese government does not seem to be supported by the end of the economic policy. "Then there will be follow-up of a series of policy initiatives to follow up." 6:00 in the evening on the same day, our reporter to call the relevant officials in decision-making, has been such a reply.
CICC macroeconomic research team in this week released a "security concern in recent eight," the report stressed that the economy will be relatively steady growth as a top priority, in order to "protect eight" may continue to stimulate the introduction of the policy.
Interest rate policy should be one step?
The unprecedented intensity of the move to cut interest rates, the State Council Development Research Center, Xia Bin, director of the Institute of Finance has not shown any accident, "should be a matter of interest to the drop down to promote confidence." Xia Bin is a strong cut in the near future has been upheld Point of view.
Beijing University economist Song Guoqing, also holds a similar viewpoint. He also made clear the central bank to cut interest rates should be more bold, regulation and control departments should change the traditional cycle of interest rate increases way of thinking, the rate of inflation in a rapidly changing environment, interest rates should be adjusted as much as possible in one step.
Given the current economic situation may also severe than in 1998, CICC Ha Jiming, chief economist expects the current round of low interest rates in 1998 than the 1.98 percent rate cut cycle (one-year deposits) lower over the next 1 year Will cut interest rates 108 basis points, and reserve ratio will be down 250-450 basis points.
The central bank's rate cut significantly, Song Guoqing also told reporters that there continued to fall.
Song Guoqing pointed out that in 2008 China's macro-economic situation changes very fast in the first quarter of serious inflation pressure, to the third quarter also showed signs of deflation, the inflation rate to deal with this rapidly changing circumstances, the interest rate should be adjusted quickly.
In this regard, Ha Jiming have the same concern: to accelerate the economic downturn caused by overcapacity and pressure on the unemployed, as well as the global commodity price bubble burst, making next two years after the PPI and CPI non-food deflation may occur.
Song Guoqing of the worry is that if the small fine-tuning, 1998, the annual interest rate adjustment may be caused by the lag again. It is 1998, the country lags behind the rate adjustment, which led to real interest rates than the corporate rate of return on investment, enterprises are reluctant to invest, ultimately resulted in aggregate demand remains in the doldrums.
In view of this, it is necessary to stimulate economic growth, the need to speed up the development of direct financing channels, so that enterprises can find the funds to the market, such as bonds issued, listing the medium-term notes, short-term financing, such as coupons, and more inclined to small and medium enterprises, development Private equity fund.
Geometric rate cut to stimulate the real estate?
China's real estate industry of the importance of economic self-evident,'s rate cut on the verge of a crisis can save the edge of the property market?
"Rate cut is certainly a positive, but may not be able to reverse the current atmosphere of the property market." Financial research fellow at the Chinese Academy of Social Sciences Yin Zhongli told reporters that the current price level, can afford to buy the family house in the 2006-2007 annual average Buyers have once again cut interest rates although the level of housing prices could decline 10%, but the family can not afford to buy a house, house prices are still high threshold.
But the rate cut on the real estate consumption brought about by the stimulus for all to see, Qilu Securities, an analytical report pointed out that a total of 1,000,000 houses, down 20% after the rate cut so that it can repay their loans Cost savings 177,000 yuan, accounting for 17.78 percent of the total housing.
Yin Zhongli that the rate cut will have a substantial effective demand for certain.
However, the current real estate market does not lie in the deserted main reason for the rate cut, but those who buy a house, the developer of the market as a whole is expected to pessimism. The main buyers for the future of the unstable income and housing prices decline, and other factors, the suspension of the planned purchase. The developers of the future is not optimistic about the housing market, to adjust the pace of development, slowing down the pace of project development.
For developers, the lower the interest rate of 1% of its cost of capital to reduce significantly the role, but the current developers, the most important thing is cash flow, rather than the cost of capital.
One developer told reporters frankly, as the 2006-2007 period, rising house prices, bank interest rate increase in a row did not stop the enthusiasm of real estate, the current real estate market continued to take the cold, straight reversal simply can not cut prices.
Yin Zhongli of the view that successive moves to cut interest rates aimed at long-term deposits will be squeezed out of the system, and enhance market liquidity. These capital flows to the market, whether as a new real estate investment opportunities, "hunters"? Yin Zhongli of the view that such large-scale real estate investment momentum has not yet formed.
Canoe difficult to hold monetary policy
As China's economic difficulties, especially in October, the economic indicators suggesting the economy continues to decline sharply cut interest rates in the market expected. In this regard, Ha Jiming that, in general, a more significant positive impact. Tsinghua University economist Li Daokui then told reporters that the rate cut for two purposes, first, to enhance confidence in the economy as a whole, to reduce investment costs, in particular, to enhance confidence in listed companies, lower interest costs, and the other is actively cooperate with the Fiscal stimulus program, "because the fiscal stimulus in at least half of the money from the banks, so they lowered the cost."
As the stimulus program will work, Li Daokui to judge that China's economic growth rate next year at 9% -9.5%, "the problem of employment is the key."
However, Peking University, Zhou Qi Ren economists held that the current difficulties rather than on monetary policy alone can solve. China to relax monetary policy, the United States and Europe can not revitalize the market. He said that domestic production and investment gradually weakening the currency is not a factor in the decision, monetary policy alone should be sufficient to "double weak domestic demand and external demand".
Zhou Qi Ren of the view that monetary policy response to deflation in there, but for the start of economic growth will not be such a big role. In particular, in the long run, China's central bank did not like the U.S. Federal Reserve made money all over the world.
"Can not increase the budget deficit under the premise of the expansion of aggregate demand." Song Guoqing of the view that the fiscal policy is concerned, the Ministry of Finance could be considered the owner of state-owned enterprises on the basis of the status and power, in one way or another, through state-owned enterprises, the profits will be up close and At the same time, measures to reduce taxes.
In response, Zhou Qi Ren said, adding that the profits of state-owned enterprises instead of the Ministry of Finance to set a number of money will be able to "tune" get up. "Without substantial reform of the monopoly profits is difficult to get up." As a result, the expansion of access to increase competition and continue to push forward administrative monopoly on the sector of the market reform is essential. China such a high savings and investment in non-wang, and a lot of openness in the field of high returns are not related.
The Chinese Academy of Social Sciences Institute of World Economics and Politics of the International Institute for Monetary Research Fellow Zhang Bin said, "people who need the most urgent need for private sector investment into the most pressing areas of reform, including health care, education, logistics, communications, financial And many other service industries. "
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