Credit increment fell sharply to 355.9 billion yuan in July and remained low in August according to multiple information resources. Some market insiders have interpreted the enormous gap between the credit increments in the first and second half of 2009 as a change in the moderately relaxed monetary policies, and also as an important reason for the recent severe stock market fluctuations.
Guo Tianyong, director of the Chinese Banking Industry research center at the Central University of Finance and Economics, believes that the idea of judging the relaxation degree of monetary policies by credit growth rate merits further discussion. The key factor to judging relaxed monetary policies is not credit volume, but whether credit can meet the needs of the real economy.
Guo said that in the second half of 2009 monetary policies should focus on guiding credit increment while remaining moderately relaxed, to promote bank loans to be invested in industries and sectors which can expand domestic demand, improve the quality of economic growth and optimize structures on the basis of moderate and balanced growth, so as to lay the foundation for the long-term and sustainable development of China's economy.
Objectively, large-scale loan insurance in the first half not only created a good fund environment for the macro-economy to bottom out, but also removed the expectation of deflation to a significant extent. Six months ago, various fields in society responded strongly to the expectation of deflation, but at present this has disappeared although at present the consumer price index (CPI) and the producer price index (PPI) are still negative.
Thanks to a timely adjustment of monetary and credit policies in the first half, the expectation of deflation in China's macro-economy has been changed to a large extent and the economy has shown more signs of recovery. In this sense, the central bank's moderately relaxed monetary policies have achieved initial success.
The recent drop of bank loans cannot be simply viewed as a result of policy changes; therefore, there is no cause for concern on this topic.
For a large developing country like China, it is necessary and imperative to maintain a certain economic growth rate. Guo said that as current economic recovery is still unstable, China should continue to implement proactive fiscal policies and moderately relaxed monetary policies in the future. It is too early to discuss whether these policies will be removed.
By People's Daily Online