NEWS CENTER

The Central Economic Work Conference will hold a pre-adjustment and fine-tuning of monetary policy.


Release time:

Dec 02,2011

The annual Central Economic Work Conference will be held soon. Analysts believe that the policy setting of the meeting in 2012 is still expected to be "prudent monetary policy" and "proactive fiscal policy". Monetary policy is generally sound, fine-tuning and pre-adjustment in a timely manner and emphasizing forward-looking, flexible and targeted, while the "positive" fiscal policy is mainly focused on "structural tax cuts. Monetary policy is unlikely to be fully relaxed. In terms of monetary policy, the central bank has recently announced that it will "pre-adjust and fine-tune in a timely and appropriate manner." Analysts believe that it is unlikely to turn to full relaxation next year. Political Commissar Lu, Chief Economist of Industrial Bank

The annual Central Economic Work Conference will be held soon. Analysts believe that the policy setting of the meeting in 2012 is still expected to be "prudent monetary policy" and "proactive fiscal policy". Monetary policy is generally sound, fine-tuning and pre-adjustment in a timely manner and emphasizing forward-looking, flexible and targeted, while the "positive" fiscal policy is mainly focused on "structural tax cuts.

Monetary policy easing is unlikely.

In terms of monetary policy, the central bank has recently announced that it will "pre-adjust and fine-tune in a timely and appropriate manner." Analysts believe that it is unlikely to turn to full relaxation next year.

Political commissar Lu, chief economist of Industrial Bank, believes that as the cumulative effect of previous policies continues to appear, domestic demand has fallen to the bottom. Policy "fine-tuning" has begun, new credit balances have rebounded, and M2 year-on-year growth is expected to rebound in the first quarter of 2012. With the pre-adjustment and fine-tuning of policies, the economy is about to stabilize and rebound in the future. He said that considering that there will be a concentrated outflow of about 1.5 trillion fiscal deposits at the end of the year, there is no need to comprehensively reduce the statutory deposit reserve ratio during the year. In the face of liquidity constraints at a particular point in time, the central bank can smooth it out by adjusting the parameters of the dynamic differential reserve ratio, reducing open market withdrawals, and reverse repurchases. The full statutory reserve ratio is expected to be cut, possibly until next year. Interest rate policy is not expected to be adjusted this year, and there is great uncertainty about whether it will be adjusted next year. It is more likely that the adjustment of interest rate policy will be achieved by giving financial institutions greater pricing autonomy in terms of the upper limit of the deposit benchmark interest rate and the lower limit of the loan benchmark interest rate.

Some market participants believe that the economic growth rate is expected to decline next year compared with the same period last year, and the central bank will face greater pressure to raise interest rates in the second quarter of next year.

Fiscal policy will be more active

In terms of fiscal policy, Jia Kang (weibo), director of the Institute of Fiscal Science of the Ministry of Finance, said in an interview with a reporter from the China Securities Journal that some contradictions in my country's economic operation and social life have become increasingly prominent, and more attention needs to be paid to resolve them. The contradictory adjustment of structure, transformation and promotion of reform. The function of fiscal policy is to emphasize structural optimization, retention and pressure, and differential treatment. Therefore, in the process of changing the mode of economic development and adjusting the economic structure, fiscal policy should play a major role.

Jia Kang said that the value-added tax expansion reform implemented next year can reduce or basically eliminate the problem of repeated collection of business tax in the tertiary industry such as transportation, construction and installation, and service industry, and accelerate the upgrading of the tertiary industry.

Structural tax cuts will be the main content of the proactive fiscal policy. Jia Kang believes that in terms of tax incentives, it is necessary to provide a good tax environment for small and micro enterprises and grassroots entrepreneurs. The threshold of value-added tax and business tax for small and micro enterprises has been raised, which needs to be fully implemented in the future; the reduction of income tax for small enterprises by half also needs to be further refined and implemented in management; and the exemption of stamp duty on contracts for loans from financial institutions to small and micro enterprises will be necessary to continue to implement in the next few years.

In addition, in terms of industrial policy, analysts believe that seven strategic emerging industries and modern service industries are expected to continue to receive policy support. Monetary and fiscal policies will cooperate with industrial policies in terms of credit and tax incentives to promote the development of the above-mentioned industries and help the transformation of the economic structure.