Article by Jion
Foreign exchange and the currency issue, China’s currency pegged to passive shares, this often allows suffering, plus the serious inflation, the system is like the culprit; China, however, and the fact is, the shortage of money, the most obvious performance is turn tide, the small and medium-sized enterprises collapse on whether China is capital surplus, or the shortage of capital? We can only believe that fact.
We are faced with the absolutely not capital surplus. Inflation because of excess funds that the obvious without spectrum. Inflation is a capital phenomenon, and prices are not, don’t always will prices as inflation to management, China is facing prices, rather than inflation.
In this round, though China and regulating DuoCi raise interest rates, but it’s not quite enough, China is still supportive, on the one hand, is don’t want to increase lending the burden of the enterprise; On the other hand, is perhaps the most important consideration is don’t want to make, and hence attracting interest spread of hot money inflows.
Hot money really so terrible? The author don’t think so. Hot money can only become the asset bubble of the booster, and not be a engine. And any asset bubbles caused by domestic funds can only lead to, rather than foreign hot money, hot money also just created a “help a tyrant to do evil” role.
The current China property market, the stock markets are low, hot money and not too much place to go. As long as the Chinese do asset prices, that is not afraid of the regulation of hot money attacks. Can we look at the United States, the United States when fear overheating money! The flow of hot money is the economy’s strong performance, the American people have been emphasized a strong dollar in the interest of the United States, the concept that it has the same in China.
China in a period of time, all will keep a stronger yuan the situation, that a stronger yuan performance in where? As for the value of the yuan rise and RMB deposit rates. Hot money to the affirmation is going to get into the Chinese Banks, to enter the bank for our economic construction, the Chinese have used what bad? Hot money into the bank after into loans role in the economic construction, and the benefits of heat, not the interests of arbitrage income money small! The difference between the two is the bank lending benefits, this part of the revenue belongs to China.
The world capital of course to the “economic best” countries, China will lead the world flow, don’t be afraid to follow, capital in a way it’s a good thing.
But other economists argue that China’s economy will be hard landing, and the reason for China’s investment is not sustainable. Why not continue investment? China is not enough project? Apparently not. Is China’s private enterprises lack of investment enthusiasm? Of course the more is not. The most fundamental or because the question of funds-money, money lending light late to keep up with, of course, will happen to a hard landing of the economy, but at this time of the foreign hot money not just make up for the Chinese capital short-term? China should be a big help, help the economy of China establish a good growth to the closed-loop chain. China’s economy great-leap-forward development is also should done. But the central bank continuously improve the deposit reserve rate will make good thing is about to become bad thing.
The central bank’s decision basis in fact or so-called “monetary super hair” trigger inflation logic, and this argument has already been a collapse of small and medium-sized enterprises tide that cold reality shatter, so the so-called currency super hair without fundamental spectrum. China’s statistics also have long shown that China’s inflation because food is the first factor, and input sexual factors, such as the recent pork prices, and the currency issue without any relationship, the same input sex factors also we can’t control. In the long run, and labor prices factors and rent a rebound in the matter of, these is inevitable.
China’s broad money (M2) of more loan exuberant, this is because China’s economic performance, high active M2, a lot of people say base currency (namely the commercial bank deposit reserve and public held cash) put too much, and the main composition is M2 deposit, and these deposits are not real residents and enterprises of the original deposit, is more of a loan to deposit and become “derived deposit”. China M2 show higher loan and loan, China active active and monetary issue of concern is not big.
A economies if the investment is not active, the money multiplier (refers to the monetary supply base currency of the multiple relationship between) is too small, no matter how much the currency issue, the M2, America is couldn’t get on all this is the case. Of course there are other Chinese M2 some of the reasons too, such as the definition of the M2 of different countries, different statistics caliber different. M2 and a country of financing has the very big relations, if is direct financing as the data, the smaller the M2; If is indirect financing, the M2 data is bigger.
We should appreciate that great pattern of the world is the developed countries and the developing countries of the market economy is already very inconsistent, is likely to developing countries has welcomed the second round of the economic crisis, the developed countries haven’t come out the last economic crisis, this is normal, the international fashion “decoupling theory” also is probably the reason.
In short, China set economic policy, do more to consider his own core interests, to get out of your own policy market. China does not need the money era is history, China is about to enter the lack of money era. Lack of money age to the China’s “hot money” from some kind of degree, can alleviate the hunger, in fact, China capital of the country such as the United States almost entirely by foreign capital to support its economy, China also can be in do not produce dependent, careful way. This development for reference
About the Author
I’m Jion , which offers quality products such as China Mobile Phone Touch Screens, Cell Phone Hands , and many more. Know more , please visit Mobile Phone Flex Cable .
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