The author is Mo Kaiwei, a researcher at the China Institute of Local Finance
On January 18, the Information Office of the State Council held a press conference on financial statistics in 2021. Liu Guoqiang, deputy governor of the central bank, stressed at the meeting that the current economy is facing triple pressure, and the current focus is on "stability", "stability" itself is the biggest "advance"; and said that monetary policy should be more vigorous:
The first is to make sufficient efforts, open the monetary policy toolbox a little larger, maintain the stability of the total amount, and avoid credit collapse; the second is to make precise efforts, to make the vast and subtle, the financial sector must not only welcome customers to the door, but also take the initiative to attack, in accordance with the requirements of the new development concept, take the initiative to find good projects, do effective additions, optimize the economic structure; the third is to rely on the front. Although it is the beginning of the year, but the time of year is very short, the plan of the year lies in the spring, so we must pay close attention to doing things, forward-looking operations, walk in front of the market curve, respond to the general concerns of the market in a timely manner, and cannot be delayed.
At the same time, the statements and views of the relevant leaders of the central banks participating in the meeting were also very direct, which caused widespread discussion in the market.
It should be said that at the press conference held by the State Council, the leaders of the central bank expressed this statement on the current central bank's monetary policy, which fully demonstrated the central bank's firm determination to stabilize growth, stable expectations, and stable credit, and also fully expressed the central bank's eagerness to reverse the current economic and financial situation. Of course, seeing such a straightforward statement by the central bank has enhanced the confidence of various market economic entities and all the people in the financial and economic work in 2022, and also seen the new hope of the mainland's economic stabilization and recovery, and is also more full of yearning for the prospects for economic and financial development in 2022; I also believe that with such a powerful central bank exerting efforts in monetary policy, China's economy will certainly be able to get out of the trough and return to the track of steady and sustainable development, and China's economy will continue to make positive contributions to the world economy.
Although the statement of central bank officials is very straightforward and clear, releasing many important signals of monetary policy, what can we smell from the statements released in the news? As long as the friends who pay a little attention to the current economic and financial situation will at least smell three different "tastes":
There will be more room for RRR cuts and interest rate cuts, the intensity of monetary policy easing will be greater, and the financing environment for real enterprises will also be more relaxed.
As we all know, despite the two RRR cuts in July and December 2021, the current average reserve requirement ratio of financial institutions is only 8.4%, which is not high compared with other developing economies or the historical reserve requirement ratio of the mainland, and it seems that the next step of the reserve requirement ratio is smaller. However, it should be noted that it is obvious that entity enterprises, especially small and medium-sized and micro entity enterprises, still have financing difficulties and are suffering from financing difficulties, and banks need to continue to give generous credit support to release more liquidity to solve the financing difficulties of entity enterprises.
It should also be noted that the current cost of financing of entity enterprises is still high, although the central bank, financial regulatory departments and government departments have adopted many targeted interest rate reduction and fee reduction policies to solve the financing of entity enterprises, and the interest rate of corporate loans will generally decline in 2021, but the range is not large, and it is necessary to further increase the rate reduction. According to the data disclosed by the central bank, the interest rate of corporate loans in 2021 will be 4.61%, the lowest level in more than 40 years of reform and opening up, but there is still room for decline.
At the same time, the financing costs of banking and financial institutions are still high, which makes it difficult to actually reduce credit interest rates. In this regard, it is also necessary for the central bank to seize the favorable opportunity to cut interest rates, so as to guide the decline in the cost of liabilities of banking and financial institutions and the reduction of the interest rate of the entire social capital, which will eventually promote the decline in the interest rate of real enterprise loans.
For the RRR cut, the central bank also said that the adjustment space has become smaller but there is still a certain amount of space, and the central bank can use it according to the needs of economic and financial operation and macroeconomic regulation and control. "This shows that the possibility of reducing the RRR is greater; especially in January, the one-year medium-term lending facility rate will have an important impact on the LPR quotation, and it is expected that the next announcement of the LPR one-year and 5-year interest rates will also maintain a synchronous decline, which will guide the corporate loan interest rate downwards, and effectively promote the reduction of the comprehensive financing cost of enterprises, which will undoubtedly bring double benefits to the entity enterprises, the financing surface will be relaxed, the credit burden will also be reduced, and the entity enterprises, especially the current enterprises with financial difficulties, We must be confident in the prospects for development, and the difficulties will pass quickly.
In addition, it should also be noted that the external environment also requires the central bank to cut the RRR and cut interest rates. We have seen the recent adjustment of monetary policy in major advanced economies, and the market has strong expectations for the Fed to raise interest rates and reduce its balance sheet. Although the mainland's macro economy is large and resilient, it does not need to engage in flood irrigation, but maintaining a cross-cycle design, maintaining reasonable and sufficient liquidity, ensuring that the financial support for the real economy is stable, ensuring that the autonomy and stability of the financial system are enhanced, and maintaining the expected stability of the RMB exchange rate, etc., also need to reduce the monetary response policy of the RRR and interest rate reduction.
This year, the growth rate of credit delivery will be higher, and the active marketing loans of banking and financial institutions will also reach an unprecedented intensity.
According to the views expressed by central bank officials, to ensure the tone of "stability", monetary policy needs to pay attention to the front and reflect the significance of "entering", while the yardstick for measuring whether to "enter" is inseparable from the steady growth of credit; if there is no steady growth of credit, not only "stability" cannot be achieved, but also the "advance" of monetary policy. Especially according to the current central bank officials, the current key goal is "stability", which is more necessary for monetary policy. Obviously, at present, it is not only necessary for the central bank to provide a relatively loose monetary policy environment, but also for the financial regulatory authorities to urge banks and financial institutions to increase credit. According to the financial statistics just released by the central bank, the new RMB loans in 2021 will be 19.95 trillion yuan, an increase of 315 billion yuan year-on-year, although the total amount of new RMB loans is not bad, but the growth rate is still unsatisfactory. In 2022, there are still many problems that need to be solved, such as the real estate industry investment needs to be started to help real estate out of the harsh winter to avoid various risks, urban investment needs to be activated, and the projects supported by local governments to stabilize growth need support, all of which need a large amount of credit funds to support.
The most important thing is that "a year's time is very short, and the plan of the year lies in the spring, so we must pay close attention to things, forward-looking operations, walk in front of the market curve, and respond to the general concerns of the market in a timely manner." "This requires the central bank and banking and financial institutions to plan early and take credit support measures as early as possible, so that the function of credit supporting economic recovery can be brought into play as soon as possible." In particular, in accordance with the requirements of banks, monetary credit should be sufficient, precise and forward-looking, and it is more necessary for the central bank and banking and financial institutions to establish a new development concept, take the initiative to attack, eliminate the past practice of waiting for customers to come to the door, break the current deadlock in which supply and demand in the credit market do not correspond, increase the investigation of credit market demand, take the initiative to find good projects, do effective additions, and optimize the economic structure; at the same time, we must pay close attention to doing things, forward-looking operations, walk in front of the market curve, respond to the general concerns of the market in a timely manner, and eliminate the phenomenon of credit delay. Respond to market concerns in a timely manner, do all credit work in the front, let credit funds flow to the entity enterprises that need funds most and are most efficient in a timely manner, rejuvenate the vitality of enterprises, and accumulate financial momentum for the further growth of China's economy.
Based on this objective financial and economic situation, in 2022, more entity enterprises will receive credit support from bank financial institutions, especially small and micro enterprises, scientific and technological innovation, green development and other industries will receive greater and more credit support, a large number of small and medium-sized and micro entity enterprises will also get rid of the predicament, regain business vitality, and China's economic market will be more stable.
The financial environment for real estate, urban investment and other government-backed and stable growth investment projects will be greatly improved, and the economic growth effect of various investments will be more obvious.
As we all know, in the second half of last year, the risk of individual real estate enterprises such as Evergrande became explicit, and affected by this, the risk aversion of various real estate entities rose, and financial institutions also had short-term stress responses. This is detrimental to the steady development of the real estate industry and may also accumulate greater financial risks. In this regard, the central bank, financial regulators and local governments at all levels have taken a positive response to the real estate industry, first the central bank, banking regulators came forward to dispel the rumors of Evergrande Risk, followed by a voice of support for the real estate industry to ensure the steady development of the real estate industry, to guide banking financial institutions to accurately grasp and implement the prudent management system of real estate finance, to maintain the smooth and orderly release of real estate credit, to meet the reasonable financing needs of the real estate market, to avoid a hard landing; this year also issued the " Notice on Doing a Good Job in M&A Financial Services for Risk Disposal Projects of Key Real Estate Enterprises, guiding financial institutions to support risk mitigation and industry clearance in a market-oriented manner. At the same time, local governments also adhere to the principles of rule of law and marketization, and do a good job in defusing the risks of insurance enterprises.
All this has released various potential risks in the mainland real estate industry, and the central bank officials said that recent real estate sales, land purchases, financing and other behaviors have gradually returned to normal, and market expectations have steadily improved. According to the financial statistics just released by the central bank, at the end of 2021, the balance of real estate loans nationwide was 52.2 trillion yuan, an increase of 7.9% year-on-year, which shows that financial credit support for real estate is still in place.
According to the viewpoint at the press conference: "Real estate and urban investment are at least loose", it is estimated that the strict control scale of the real estate industry or urban investment will be relaxed, and the situation of capital tension will also be alleviated; especially means that the regional policies of the real estate industry should be relaxed to a certain extent, especially in the second, third, and fourth-tier cities, and the loans for some newly started projects will also be implemented.
The most important thing is that banking and financial institutions will fully implement the long-term real estate mechanism in accordance with the requirements of exploring the new development model, maintain the continuity, consistency and stability of the real estate financial policy, properly implement the prudent management system of real estate finance, increase the financial support for housing rental, and promote the virtuous circle and healthy development of the real estate industry due to the city's policies. Moreover, all kinds of urban investment projects may also be activated, the basic projects of local governments to protect people's livelihood will also be launched, and the foundation for promoting economic growth will be more solid. It is hoped that real estate enterprises and local governments at all levels will not be pessimistic and discouraged, but will welcome and face the arrival of 2022 with a positive attitude, and many difficulties will be effectively solved.
Edited by Tao Yueyang
(Download Red Star News, there are prizes for the newspaper!) ）
