nach oben

Erschienen in:

2009 | OriginalPaper | Buchkapitel

The China Monetary Policy Handbook

verfasst von : Jonathan Anderson

Erschienen in: China’s Emerging Financial Markets

Verlag: Springer US

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

The monetary policy plays a critical role in the Chinese economy. This report takes a detailed and fundamental look at each of the following questions: (i) How does policy work? (ii) Which variables does the People’s Bank of China (PBC) target? (iii) Does it have market-based tools? (iv) Does it have effective control of interest rates and liquidity? (v) Can it really influence growth and inflation? Or is the economy “beyond control,”chronically lurching into overheating, asset bubbles, and eventual sharp downturn. It also summarizes in part much of the work we have done on monetary and financial markets over the past few years.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel Monetary Policy Implementation in China: Past, Present, and Prospects

Nächstes Kapitel The RMB Debate and International Influences on China’s Money and Financial Markets*

¹ We use the average of published bank lending and deposit rates for each country in question, and have attempted to come as close to a standard one-year rate as possible within the constraints of the data.

The base money growth figures in these two charts are adjusted for changes in the required reserve ratio.

The currency weights are 65% USD, 35% EUR and 10% JPY, and the maturity weights are 67% 10-year yields and 33% 3-month rates.

Remember that the NDF premium/discount on the renminbi defines the forward exchange rate against the dollar; the amount of expected renminbi appreciation is in turn is by definition equal to the difference between US dollar interest rates and an “implied” renminbi interest rate for the period in question. We use the one-year NDF forward rate and the one-year US dollar LIBOR rate to derive the implied renminbi one-year yield in the chart.

For further information on central bank capital and experiences with negative net equity, see Dalton, J., and Dziobek, C. (2005): “Central Bank Losses and Experience in Selected Countries.” IMF Working Paper, No. WP/05/72, April 2005, Stella, P. (1997): “Do Central Banks Need Capital?” IMF Working Paper, No. 97/83, July 1997, Stella, P. (2002): “Central Bank Financial Strength, Transparency, and Policy Credibility.” IMF Working Paper, No. WP/02/137, August 2002.

The astute reader would be tempted to reply that banks could simply sell their sterilization bills to increase liquidity, but this is not correct. In general, sterilization instruments can only be held by banks, which means that the central bank has complete control over the amounts banks hold.

Chart 57 differs from Chart 5 above in that the earlier Chart only includes bonds held outside the banking system; this proved difficult to calculate on a cross-regional basis and so Chart 57 includes the total stock of government and corporate bonds outstanding. See The Return of Asia, Part 4 (Asian Economic Perspectives, 20 November 2006) for further details.

The reason new share issuance is a “leakage” is that the issuing companies would have otherwise presumably borrowed the funds from the banking system; this implies lower credit growth and thus lower deposit growth. Even this argument is tenuous in an environment where the monetary authorities are administratively dampening credit growth (since the fact that companies are moving into equity finance doesn’t necessarily lower aggregate credit creation in this case), but over the medium term we do expect disintermediation out of the Chinese banking system to have a significant effect on balance sheet growth.

Note that the data in Chart 68 differ somewhat from the published overall GDP growth figures by industry; the reason is that we have taken the expenditure side GDP data, which are only published in nominal terms, and deflated them using the official GDP deflator. The two sets of data are not entirely consistent, but the broad picture is still very relevant.

¹⁰ The UBS Expenditure index measures the pace of real expenditure growth in three broad categories: household consumption, fixed asset investment and net exports, based on monthly trade and investment data and quarterly household expenditure surveys. These are the three main components of GDP from the expenditure side as well, so in principle there should be broad correlation between our index and overall GDP. On the other hand, keep in mind that the Expenditure index excludes other important GDP components such as government spending, inventory accumulation and services trade, which means that the index tends to overstate actual growth in practice.

¹¹ The UBS Physical Activity index is a composite of five sub-indices, all based on physical volume growth data at the sectoral level: electricity production, passenger and freight haulage, agricultural production, construction activity (including new construction starts and completions, total floorspace under construction and land development) and industrial production (derived for bottom-up data for individual goods categories).

Forssboeck, Jens, and Lars Oxelheim, 2007, “The Transition to Market-Based Monetary Policy: What Can China Learn from the European Experience?”, Journal of Asian Economics, Vol. 18, No. 2

Goldstein, Morris, and Nicholas Lardy, 2007, “China’s Exchange Rate Policy: An Overview of Some Key Issues”, Paper Presented at the Conference on China’s Exchange Rate Policy, Peterson Institute for International Economics, October 2007

Goodfriend, Marvin and Eswar Prasad, 2006a, “A Framework for Independent Monetary Policy in China,” IMF Working Paper No. 06/111, March 2006

Goodfriend, Marvin and Eswar Prasad, 2006b, “Monetary Policy Implementation in China,” BIS Papers No. 31

Lardy, Nicholas R., 2005, “Exchange Rate and Monetary Policy in China,” CATO Journal, Vol. 25, No. 1, (Winter)

Laurens, Bernard J. and Rodolfo Maino, 2007, “China: Strengthening Monetary Policy Implementation”, IMF Working Paper No. WP/07/14, January 2007

Ma, Guonan and Robert McCauley, 2007, “Do China’s Capital Controls Still Bind? Implications for Monetary Autonomy and Capital Liberalization”, BIS Working Papers No. 233

McKinsey Global Institute, 2006, “Putting China’s Capital to Work: The Value of Financial System Reform.”

Podpiera, Richard, 2006, “Progress in China’s Banking Sector Reform: Has Bank Behavior Changed?” IMF Working Paper No. WP/06/71, March 2006

Prasad, Eswar, 2004, China’s Growth and Integration into the World Economy: Prospect and Challenges, IMF Occasional Paper No. 232

Prasad, Eswar, Thomas Rumbaugh, and Qing Wang, 2005, “Putting the Cart Before the Horse? Capital Account Liberalization and Exchange Rate Flexibility in China,” IMF Policy Discussion Paper, PDP/05/1

Xie, Ping, 2004, “China’s Monetary Policy: 1998–2002”, Working Paper No. 217, Stanford Center for International Development

Titel: The China Monetary Policy Handbook
verfasst von: Jonathan Anderson
Verlag: Springer US
Buch: China’s Emerging Financial Markets
Print ISBN: 978-0-387-93768-7

Electronic ISBN: 978-0-387-93769-4

Copyright-Jahr: 2009
DOI: https://doi.org/10.1007/978-0-387-93769-4_5