Since inflation is still important that we face the threat posed, then how do we inhibit
system inflation? Two terms, one is from the perspective of the real economy, a monetary point of view from
speaking, the actual economic perspective, we know that the total demand in China to promote the two most important factors
fixed asset investment and exports, which is the central leadership has repeatedly expressed,
fixed asset investment, real estate investment from a very important role in China's investment rate is
45% or so, this has been going on for over a decade, this situation not in the world,
level of development in China is now above the rate of investment to maintain 45%, not a single country
home like this, its investment rate must be high, due to my continued high rate of investment growth in the GDP growth rate
, so the investment rate is rising, this also make our economic growth
long a problem, which is the largest factor in rising rate of investment growth is greatest contribution to
real estate investment sector. China I think there is serious real estate bubble is not All
Department of scope, but some big cities.
real estate in Hong Kong responsible for a very major people have told me, he said that Hong Kong
average size of the area is 47 square meters, while the mainland less than one square meter of young people do not buy
, he said you too much. Two weeks ago I met in Malaysia with Lin Tao Shen,
he said, I am now writing a book called China's real estate issues discussed, I write, people think that the real estate Q
is a very serious problem, I think the regulation of real estate, real estate growth rate of compression is inevitable
. Although I do not know what the central policy, but I think this should be a consensus.
following this policy guidance, real estate, sources of funding will be controlled.
while real estate prices will fall, down to the number, some commercial banks say no more than 30% We have no problem, more than 30% we have difficulties. this really need our vigilance, we need to know.
people told me, but the Hong Kong Monetary Authority, we often fell 50%, 60% are common, but I
were not a bank collapse. If the bank fell 30% down, that we reform the preceding unsuccessful
banks.
trade surplus with the absolute amount is relatively large, and other countries, Because China is
more export-oriented export companies themselves, not to increase the export of domestic demand is insufficient, and it
production to exports. Such export is bound to put pressure on supply capacity, which is
is causing a major cause of inflation. monetary point of view, it is the source of the appreciation of the RMB
too slow, would not appreciate the previous period. It's a logical sequence what is it? First, we implement the long-term China
various kinds of export-oriented policies and attract investment preferential policies, such policies lead to the following
China's double surplus, the surplus from 91 years of double-start, only a year or two exceptions,
double lasted so long there is no surplus in the world, the East Asian countries, when a double surplus
are very short, not like us. the case of a double surplus
appreciation of Renminbi not want people to necessarily lead to liquidity surplus, increase in base money in order to prevent the central bank intervention in foreign exchange markets
, into the currency in circulation, an increase of base money, you need to offset the increase in base money
out, the central bank adopted a sterilization policy, the central sales vote to raise reserve ratio,
currently more successful of these policies, but its economic impact is large, especially for commercial
business banks, commercial banks have only 40% of the assets of 1,2% of the proceeds It is only the remaining 60%
assets to good use, it is to chase a higher risk investment, increase the size of its loans, all of
of these are the healthy development of banks, the profitability of banks adversely The. hedging policy although
temporarily successful, but not longer duration, it has its limits.
below the current situation, due to the expected appreciation of the U.S. interest rate and the interest in China back < br> hanging, more hot money inflows, and one double surplus itself is not hot money, plus hot
money came in, and to further strengthen the pressure of RMB appreciation, you do not want the value of the RMB rose
, and a further hedge, hedging and further strengthen the banking
harm caused further damage, in fact, form a vicious circle. in accordance with the terms of my own best way is to let people
RMB appreciation, so that the negative effects of appreciation of the renminbi could not stand many companies at once. We discuss the appreciation of the renminbi in 2003, if we were to rise to the appreciation of the process has been completed
, and 03 began the gradual growth of the Chinese economy, the appreciation of the role of a kind of contraction , l
value at that time, we may not appear the economy was overheating, and we appreciate in place, the international balance of payments may
achieve goals, we missed the best time is now
not good timing. China many of the problems is that we wait for a better time for a good time to
to miss, because the timing is good or bad only after the judge, we are too cautious. the current situation to
is the best time to appreciate later, is now becoming more and more complicated, but we are not there a way not
.
the Government's policy of slow appreciation of the speed of the first approach, which is the result of central bank intervention. < br> In fact, we ah Although a basket of currencies, etc., but the most recent appreciation of the dollar currency rate of the people
depends on the intensity of central bank intervention. because the central charge of comrades appreciate too rapidly against the Chinese fear
adversely affect the business and affect economic growth. So let me
have to be adjusted to the rate of appreciation, although we continue to appreciate further, but slower.
the other hand, the basic monetary policy or tight , no significant relaxation, although small has to adjust.
same basic trend of the central bank, but allows adjustment, which is now the policy of the central bank, after
I do not know if there is a change. But in any case called for the voice of relaxation is high, this
situation may occur following a change. The present situation is due to the expected appreciation, there
spreads upside down, to some extent, speculative capital inflows offset above the effectiveness of monetary policy. < br> The most obvious result is that now the growth momentum of foreign exchange reserves are still very strong.
see from this year, in the first quarter was 153.9 billion, although it is slow growth on the surface a bit, is actually
Since a considerable number of foreign commercial banks to hold, and was originally sold to commercial banks, central
Bank, now the central bank will not let you sell it, you have to hold, which is a non-commercial
practice, the central bank is not on the balance sheet foreign exchange reserves, according to the original caliber
increase our reserves, or soon, may be 400 billion this year, considering the actual situation may be about 600 billion
now 180 billion, and additional 400 billion to two trillion out,
This never happened before in history, the massive foreign exchange reserves.
this situation very unfavorable to China, why do I say this? I We would like to emphasize short-term under a
macroeconomic stabilization policies should be and our long-term economic restructuring
combination. Now we are largely in order to maintain current economic growth has taken more of a
policies, and these policies do not help us adjust the structure of property rights. and increasingly large, increasingly unbalanced trade. double surplus, the world's poorest countries
home is a one of the largest capital exporter. Our cost of foreign capital from the foreign investment rate of profit
point of view is 22% to 33%, we reserve the income of 4% to 5% inflation real yield
International is negative, with the rich, a sum of money borrowed 20% of the interest rate, then to lend money to debt,
this is not a loss you, this is a relatively low efficiency of resource allocation as a result. I just said, 4000
billion of bonds a problem few days ago, United States News reporters Ji Woda and Dian Hua, v. U.S. Treasury Department said he told
, Paulson came forward to take over the reason for the two real estate finance company, is the result of Asian central banks, including
requirements of the People's Bank of China to do, otherwise the terrible loss of these banks
. He asked me if I would like to confirm you here, I said I do not know.
long term there should be a problem, Paulson and the central bank is to maintain close contact, because they lose too much ,
once lost, then trust in the Fed serious problem occurs, he considered the impact
impact, not only in China, as well as Japan, many Asian countries, so he take such measures
facilities. disaster being avoided, but the problem is not resolved. We are still the growth in the first place,
In order to grow, we continue to grow and maintain the export momentum, such a policy gains and
any errors, have is to maintain our economic growth, unemployment is a waste of resources.
my thoughts, in short, we should stimulate domestic demand, should not continue to maintain double
surplus to the United States, many policies do have to do, one of the We are very hesitant key policy,
is the appreciation of the renminbi. I think we should take policy? First, continue to appreciate,
appreciation of the fast speed I think that should not slow. In this process, in order to prevent hot money
to enhance the inflow of capital controls in recent months, the hot money to strengthen the foreign exchange controls, capital inflows slowed speed
degree, may be due to other reasons, it may be played to enhance effectiveness of capital controls
use. In the past the SAFE, the Ministry of Commerce, the three are not related to the customs, a document came in, it
there were three things, they do not check, and now they are checking, so check there
a lot of money should not be blocked into the capital controls is not the ultimate solution to the problem, the most
final solution to the problem is to straighten out the price mechanism, there is very important is the exchange rate. The first point to appreciate
; second to continue to maintain a tight monetary policy. We can not go further
tight, but we should not relax it, and should raise the point, if we increase the appreciation of
larger, due to the appreciation of itself The role of deflation, monetary tightening may be
we can to be less, all in all they should be together, if you do not appreciate that, you
this money may have to continue like this. Third, strengthen capital controls. Fourth,
to take a proactive fiscal policy. This is not a proactive fiscal policy to stimulate economic growth, I just
said China's economic growth was 10.2%, less than have to stimulate the time, but We want to see the status of the standby situation
introduced, more importantly, I should be used for structural adjustment financial policy, the RMB appreciated,
some enterprises went bankrupt, finance should help. Some companies can not sell fiscal
buy, sell shoes sell for example, the Ministry of Finance all buy, buy after the person to Wenchuan La
past a pair, you sell the U.S. dollar is a promissory note, the promissory note worth less and less, instead of
such as our own use. fiscal policy is to help the implementation of structural adjustment, not stimulate,
if we find that the economy is really on a larger problem, we
policy stimulatory fiscal policy, China's financial position Well, China's debt accounted for less than 20%. We have the ability
effective demand through fiscal policy to make up the deficiency, if effective demand is really happening.
how to make our short-term macroeconomic stabilization and structural adjustment policies consistent? we
see a series of indicators, and there I have listed, but not setting them out. concluded that the two
sentence, a story, a housing market, the stock market's problems in a specific operational level, I layman, not
understand, did not dare to utter, but the basic direction of its relatively clear view of me. Last 5
month when I wrote a report, I think China's stock market has emerged serious
bubble, the Chinese government should come forward to stabilize the stock market, to strengthen the education of investors, to curb
this bubble, or bubble growing up, rose to eighty-one million people to the point of final collapse < br> Street parade .5 29 months I wrote a long article, I do not believe that monetary policy alone asset bubble solution
decision problem is in the
told me a lot of people see your article ran we are rather pessimistic, the results fell
next day it came, a lot of people call me thank the month the stock market run time significantly .6
fall under, the Government should not be afraid of intervention, the Government should think of a way too hot when cool,
but it appears irrational to fall together when it stable. Now, the present circumstances
side, I think this is so, the Government has the responsibility of stabilizing the capital market, how stable we can
to discuss. the time I do not say. I think the housing market falling house prices now a normal, production premises
the pace of development should be controlled, the Chinese real estate industry as a pillar of the economy can not, the threat of silver in the end how
line, further study.
time, all I can say.
Moderator: What is the problem we can exchange more than the teacher.
Q: More than teacher, what do you think the appreciation of the local count rose to place it?
Yu: basically can not answer this question, because there are many international, Package
including the calculation of China, from 3% to 60% of them have, and they are all important economists estimated
dollars. I think that this calculation does not make much sense, but it is clear , China's yuan is undervalued
, and now no one disputed a few years ago, argued that
a problem. It is our easiest to determine existence of a large trade surplus. If we
exchange rate is not controlled, in the current situation following the exchange rate will rise, the exchange rate will lead to rising exports
results will be reduced, while capital and surplus of the changes will have a corresponding change in
, for example, the appreciation of a period, I import and export balance, that when my
net capital inflows is zero. revaluation surplus then I may be there, which is completely
possible, this When should a capital exporter, like Japan, the Japanese trade surplus with the appreciation of the future as well
, but its export of capital, and exchange rate appreciation after he discourage exports and encourage
into the mouth at the same time to encourage enterprises to the outside world, So after a relatively large appreciation of the renminbi appreciation,
everyone to see, there must be a considerable number of enterprises will certainly goes out, we actually have to go out a lot of
companies, of course, will increase the external financial assets It is the combined external balance
reasonable exchange rate. theory is that, specifically, how, how long should the adjustment process, which is another
operational problems, how much you want to ask me in the end I can not say. now says,
it obvious bottom, for example, were up another 10%, 20% I think that there is not much to ask
problem. This is no basis for my feel it.
Q: Now we are more pessimistic piece of external demand, the European economy, the U.S. economy are
down, against this background that the following words of appreciation to continue next year, the import and export of China's GDP,
contributions may be negative, against this background that the appreciation of the following do you think there is so much space do?
Yu Yongding: the situation below, actually considering the appreciation of change. As I said,
what is a proper appreciation? companies with balance, the exchange rate is reasonable, not
external intervention, there is no market distortions in the following, from the present situation, the growth rate of world economic
decline, a factor of natural to make your export growth rate might fall under the
. put this factor into account, may be appreciated in the original case not so
large following, which affirmed. a period of time, the central banks to stop interfering no matter, let the market find equilibrium values
, this time the number of export growth, import growth rate of the number, the size of the capital output
out in the end how much? it will have a more natural to find a balance, for
you just said, I fully agree, that is, thanks to this situation, the magnitude of the appreciation may be reduced accordingly
, but the appreciation of this principle can not be changed, but also need to understand that,
although we the growth rate of imports and exports declined, possibly zero, possibly negative. If the negative
, and its contribution to economic growth is negative, but its still a big surplus this year, China's export surplus out
I think probably at least 300 billion more than what is now so far, each
almost 200 million monthly surplus, we still have a lot of trade surplus. We are in the The goal is to set the basic balance, which is two. one of our economic growth can no longer rely on external demand
to promote, because China's economy is too great, the outside goes wrong, we
to feel nervous, we Chinese not the kind of small countries, in China's trade-GDP ratio of 70%,
ratio of China's exports accounted for 40% of GDP, Japan is the largest trading nation, its GDP
total trade accounted for 20% of its exports That is more than ten percent, China is more than ten per cent, which is this big country of China
completely inappropriate, you're exactly right, once the growth rate dropped it certainly is a negative contribution
, and by consumer demand, such as the increase in government social security system to improve,
public education, health care system, medical system, and so the investment, or increase government
in recurrent expenditure in this regard to make up for the import and export growth rate of the decrease in economic growth into the negative impact of making
.
Q: Because you are now on the economy, I see that you speak on the economic prospects for future growth
not very pessimistic, but in the capital market on the economy or doubts about the future trend, we
think the future trend of the economy is a recession-like walk. this area to see how you are in the end?
Yu Yongding: the premise that does not exist in terms of fundamentals, it is my experience. And
I'll give you a very frank, I was 79, started work at the Academy of Social Sciences to carry out economic research, I was very pessimistic in the 80's, I think that each policy has a problem, I always say China may
be trouble, the results I was wrong, I'm 88 years abroad, and later I came back, I changed, every time I said no matter
, the results always have, this is my experience, I
with foreign economists say no to this and that, the Chinese point of death, certainly you are wrong, so I set up a confidence,
that confidence is not unfounded. a very simple, 98 years in Southeast Asia financial crisis,
bank bad debts when we are more than Nicholas las, they pull me to the Chinese Foreign Ministry,
I said, exist in China, and so despite our problems, but we are China's economic growth rate < br> pretty high, over time, the debt balance is lower. there is one, that
it at the time the financial position of China is quite good, although the bank is not good, the financial and banking is the
two pocket a piece of clothing, I moved to where the money from the banking problem is solved. The
to as long as China's financial situation has not deteriorated, the Chinese economy would be no problem. financial condition
The main measure of marked-GDP ratio of outstanding debt, Japan is 170%, further below this
use fiscal policy to stimulate the economy is very difficult, not more than 20% in China, while China is the rapid growth and
countries, China's fiscal revenue is 30% per year increase in,
it fast. out of the things we must stare on the financial piece, I do not worry about China's economic uproar by the sudden
to go, nothing to die, I have it a last resort financial, political
government spending must be able to stimulate up, this is my firm belief that the time .98 years,
we have an argument, you can see I wrote the article, when the Chinese economy in the academic competition should not be taken
expansionary fiscal policy, which had already been entered deflation
. I firmly advocate the use of expansionary fiscal policy, and I think this is the expansionary fiscal policy will make China
out of deflation, and will not worsen the financial situation, I have an equation
to explain this, I said the words were not without cause, because I was 96,98 years in Osaka, Japan
, 96 years, the Japanese say that our finances are bad, we must increase the consumption tax,
this will improve the financial situation, so that our debt-GDP ratio gradually down, 97 years to raise the consumption tax
, 98 years to fall into recession. raising the consumption tax seems to solve the financial deficit
word problems, raising the consumption tax people not to buy things, the economic growth rate has declined, debt
Services balance-GDP ratio, its limit is equal to the ratio of budget deficit divided by GDP, economic growth
speed, you can launch this formula, the molecular are positive, or a very small number, and the denominator
is a very large number, 10%, 11%, maybe has an addition to the debt balance-GDP ratio is a very small number
, it is a limit, as time goes by it to a small number of
as long as China's financial undefeated, the Chinese economy will not have disastrous consequences.
Q: I teacher, I have two questions, you just can not say that China's economic growth in the future by
by the real estate, However, external demand is now slowing down the next two to three years following the situation, China
such a high investment rate, the first discard consumption aside, if there is no real estate investment, how can our economy by maintaining such
the growth rate? second issue, related to consumer issues, you must change
also said economic growth to consumer-based, but now the country's wealth distribution pattern of the case sub
following are that stimulate consumption, how can we stimulate consumption up
it?
Yu: you said is very important, I think that economists do not solve this problem
, the Government does not solve the , otherwise we are not so dragged on for so many years this problem has not resolved
.
real estate issues we can look back 93 years when overheated real estate, and then
waiting in Hainan, At that time the state economy is in recession. Bank of frustration is to allow banks to increase loans
, bank does not increase, this time to find a growth point of how to make banks to increase lending, with loans to enterprises
industry will develop production. Finally, after much consideration they, according to international experience,
that mortgage is an important way, because China's high demand for housing
, if you made mortgage loans, that this money would be more and more . Since the money he premises
production developers have the financial resources, he would build a house, it is the policy of 99 years.
government policy made this great success, Shanghai is to open the head. I say this, mainly that the real estate
is not natural, inevitable that China's pillar industries, and this is the policy of previous years
a result, the real estate should be a pillar of national importance , but not like this
What is important in China, especially in this stage of development in China now I think a lot of real estate development is super
ago, I was with you cite the example of Hong Kong. I own a lot of living abroad In addition to
in the United States, the land is very large, very cheap, not the same. you are in the UK, or other
very poor place to live, even very rich people do not quite tell us the status of
than Chinese, I do not know what house you live in, I was very ordinary, my classmates
thousand square meters of living, and not him, this is not too much, a family of three people , employed 2
a nanny, these are the development of deformities, excessive real estate development must be suppressed,
because the state can not rely on real strong and prosperous development of real estate, it is not high technology with
volume, it is limited. overheated real estate development concern in previous years, manufacturing is not hot, the sale of shares of the hottest tickets
to industry is not hot, this country is finished, we must Niuguo Lai, Do you agree with this
a necessity, the first problem is solved.
we come to this step, you fear a sudden collapse in the banking bad debts, bad debts soared last made
into many problems, so it should be is more cautious. how to do? I think the only way to continue
continue to follow the current austerity, wait and see, I have no better way,
this is to experiment by gradually error correction process to achieve the growth rate of real estate development
under control, real estate can continue to be developed, but not thought about skyrocketing, otherwise I
we will face Japan, the United States that the collapse of the real estate bubble great impact on economy.
stimulate consumption problem has been talked about seven or eight years, or even longer, it does not
achieved. There are two, one of our government's determination not really great, or we No body has
effective provision of public goods, public goods, including the social security system, including medical body
system, including the education system, etc., there is not just an economic issue, both political problem, the system
degree of problems, such as private university, I have a student in Hong Kong, he wanted to do a
years of a university is not done to make one last run classes. I have many friends in Hong Kong and the new add
Poe, like the running of hospitals in China, talking, finally gave up, can not accomplish, because we have
control. This should be changed, the monopoly of education should be changed, why not allow it to establish private school big
? have the capital, was, with his management, the hospital is the same, these institutional reforms
involved in our problem, this is the economists can not answer.
asked to answer your questions, why not? Some aspects of the economic guidelines, but the key is to prevent
The institutional barriers, so keep up the economic system reform and the combination of step I think this was a relatively backward
. and now departments interests of the department of conflict, very bad toss.
I want to discuss stabilization fund established, stable stock market, who control the stabilization fund, Zhou
Ogawa pipe, tube or Shang Fulin, who pays, is the week Ogawa, or who pays money, a lot of things there is no way to determine
situation, and now I talked about the monetary policy, monetary policy, the most basic, central
line for independence, or else there will be as I say old, Zhou Xiaochuan said I would not raise interest rates, over a rise he
months, he was talking about lies, or not sincere, but he could not
have to say, in order to solve this problem Central bank independence was resolved, the authority said the CBRC
large than the central bank, through this control, the control of the loan on the tube, and very
more involved in administrative reform and then a more general reform of the system is necessary.
many problems unresolved question, in particular the restructuring of our problem is not resolved, largely
is concerned with supporting these reforms do not.
