As the People’s Bank of China deletes the phrase in the new report, China has laid the foundation for easing

Read Time:3 Minute, 20 Second


On September 28, 2018, people walked past the headquarters of the People’s Bank of China (PBOC) in Beijing, China.

Jason Lee | Reuters

BEIJING-The Central Bank of China deleted several words about policy restraint in its quarterly report, and economists said this may indicate that stimulus measures are being implemented.

Since China got rid of the worst impact of the pandemic last year, the People’s Bank of China has kept its monetary policy unchanged. Economic growth has slowed in the past few months due to regulatory blows to the real estate industry, power shortages in factories, and low consumer spending.

The third-quarter monetary policy report issued by the People’s Bank of China late Friday did not mention how the central bank will not conduct a large-scale flood-like stimulus. This is a phrase expressing policy restraint, which has appeared in central government statements since at least the 2019 pandemic.

“In our view, these deletions represent a formal change in the policy stance of the People’s Bank of China and laid the foundation for more decisive monetary and credit easing,” Nomura Chief China Economist Lu Ting said in a report on Sunday . He pointed out that China is experiencing the worst economic slowdown since 2015, excluding the initial outbreak of the Covid-19 pandemic.

Lu pointed out other cuts, including cuts on controlling the money supply-a measure of cash and other easy-to-use currencies. Expanding the money supply usually stimulates economic spending.

Macquarie Chief China Economist Larry Hu said in a report on Sunday that the money supply was first mentioned in a report in November 2020, when the central bank was about to end the stimulus measures during the pandemic.

“This time, remove the phrase[s] Step up the stage of monetary easing,” Hu said.

In keeping the monetary policy flexible and targeted, the People’s Bank of China also deleted the term “normal” monetary policy.

Hu said the People’s Bank of China has become more cautious about the outlook for inflation. Although a sub-heading in the central bank’s latest report still described the pressure of price increases as “controllable,” the author deleted the reference to unfounded long-term inflation or deflation.

Little changes in real estate regulation

Even with these signals, economists expect Beijing to move quietly.

On Monday, the People’s Bank of China kept the benchmark lending rate unchanged for the 19th consecutive month since April 2020.

“I don’t think there will be a major change in monetary policy,” said Bruce Pang, head of macro and strategic research at China Renaissance Capital, in Chinese, according to CNBC.

On the contrary, deleting these fairly “absolute” statements will give policymakers more room for future action, Pang said, noting that policymakers have rarely used these phrases in the past month or so.

We believe that the worst period for the real estate market and the overall economy has not yet arrived, and only then (probably in the spring of 2022) will we see some real changes in real estate restrictions.

Ting Lu

Chief China Economist, Nomura

Despite growing concerns about the economic slowdown, the People’s Bank of China still maintains a strict stance on the real estate market-the real estate market and related industries account for about a quarter of the Chinese economy.

After Beijing’s efforts to reduce the dependence of real estate developers on high debt levels, industry giant China Evergrande has been on the brink of default in the past few months.

The central bank said in a report on Friday that risks in the real estate market are controllable and the overall healthy development of the industry will not change.

“We believe that the worst period for the real estate market and the overall economy has yet to come, and only then (probably in the spring of 2022) will we see some real changes in real estate restrictions,” said Lu of Nomura Securities.


Do you like money and finances? I invite you to go to finance news

Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %
We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners. View more
Cookies settings
Accept
Decline
Privacy & Cookie policy
Privacy & Cookies policy
Cookie name Active

Who we are

Suggested text: Our website address is: https://updatednews24.com.

Comments

Suggested text: When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection. An anonymized string created from your email address (also called a hash) may be provided to the Gravatar service to see if you are using it. The Gravatar service privacy policy is available here: https://automattic.com/privacy/. After approval of your comment, your profile picture is visible to the public in the context of your comment.

Media

Suggested text: If you upload images to the website, you should avoid uploading images with embedded location data (EXIF GPS) included. Visitors to the website can download and extract any location data from images on the website.

Cookies

Suggested text: If you leave a comment on our site you may opt-in to saving your name, email address and website in cookies. These are for your convenience so that you do not have to fill in your details again when you leave another comment. These cookies will last for one year. If you visit our login page, we will set a temporary cookie to determine if your browser accepts cookies. This cookie contains no personal data and is discarded when you close your browser. When you log in, we will also set up several cookies to save your login information and your screen display choices. Login cookies last for two days, and screen options cookies last for a year. If you select "Remember Me", your login will persist for two weeks. If you log out of your account, the login cookies will be removed. If you edit or publish an article, an additional cookie will be saved in your browser. This cookie includes no personal data and simply indicates the post ID of the article you just edited. It expires after 1 day.

Embedded content from other websites

Suggested text: Articles on this site may include embedded content (e.g. videos, images, articles, etc.). Embedded content from other websites behaves in the exact same way as if the visitor has visited the other website. These websites may collect data about you, use cookies, embed additional third-party tracking, and monitor your interaction with that embedded content, including tracking your interaction with the embedded content if you have an account and are logged in to that website.

Who we share your data with

Suggested text: If you request a password reset, your IP address will be included in the reset email.

How long we retain your data

Suggested text: If you leave a comment, the comment and its metadata are retained indefinitely. This is so we can recognize and approve any follow-up comments automatically instead of holding them in a moderation queue. For users that register on our website (if any), we also store the personal information they provide in their user profile. All users can see, edit, or delete their personal information at any time (except they cannot change their username). Website administrators can also see and edit that information.

What rights you have over your data

Suggested text: If you have an account on this site, or have left comments, you can request to receive an exported file of the personal data we hold about you, including any data you have provided to us. You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.

Where we send your data

Suggested text: Visitor comments may be checked through an automated spam detection service.
Save settings
Cookies settings