Characteristics, reasons and background of China s current monetary policy

Features: China's monetary policy is a policy adopted by China's monetary authorities to manage and regulate currency and credit in order to achieve certain macroeconomic goals. It is also composed of factors such as the ultimate goal, policy tools, operational indicators, and intermediary goals.

China's monetary policy, which continues to evolve with China's policies and development practices, has Chinese characteristics.

Reason: Prudent monetary policy is a term with Chinese characteristics, which talks about the guiding ideology and guidelines for formulating monetary policy, which is different from the mentioning of monetary policy in economics textbooks (such as "loose", "neutral" or "tight" monetary policy).

A prudent monetary policy is linked to the goal of stabilizing the value of the currency, and it includes the requirement to prevent both deflation and inflation, and it does not prevent the implementation of either expansion or contraction of monetary policy according to the needs of the economic situation.

Background: There are several main aspects:

First, after the real estate and development zone boom in the early 90s, by this year, the risk problems of some small and medium-sized financial institutions had become quite prominent, and at that time, China ** and the People's Bank of China were faced with the important task of resolving financial risks and preventing the emergence of new and more serious financial risks;

Second, although the contradiction of insufficient aggregate social demand had been exposed at that time, the most prominent problem was the structural problem, and the actual effective loan demand was insufficient;

Third, because in the past, we had long practiced a financial system dominated by indirect bank financing, and enterprises operated with high debts and had a very low proportion of their own funds, and if we continued to increase loans by a large margin, the problem of non-performing loans would become more prominent.

Fourth, the implementation of a proactive fiscal policy itself includes the use of monetary policy, with the fiscal department issuing additional treasury bonds and banks participating in purchases, which itself includes the use of monetary policy to support economic growth.

Our country's monetary policy is mainly in the following three aspects:The impact of the reserve requirement policy, the rediscount policy and open market operations on our national economy is very large.

The impact of these three major monetary policies on our country is very large, and these three tools are the three most commonly used by our country's ** banks, and they are also the tools with the most obvious effects. The regulating effect on our country's economy is very obvious, and it has also attracted the attention of the whole society.

Public market operations are the most commonly used tools. Open market business is the most commonly used tool in our country, ** banks will release a certain amount of liquidity to the market every time there is a problem in the country's economy, basically through open market business operations to release liquidity. In the case of a relatively large amount of funds in the market, a certain amount of liquidity will also be extracted through open market business operations.

The rediscount rate can affect the country's cash. The impact of the rediscount rate on the total amount of cash in our country is very large, and increasing the rediscount rate can reduce the total amount of cash in this society. When interest rates are lowered, the total amount of cash in the society increases, so that each industry can get more cash, so that the economy can develop faster.

The reserve requirement ratio (RRR) can affect all commercial banks. The reserve requirement ratio is also one of the most frequently used tools by the People's Bank of China, and the reserve requirement ratio has a certain impact on every commercial bank. <>

Through the analysis of the above three aspects, we can find that the impact of monetary policy tools on our country is very large, and every industry in our country is very affected by the currency. The three major monetary instruments are to regulate the economy of the whole country to a certain extent on the basis of influencing the amount of our country's currency.

China's monetary policy mainly includes the following three aspects: the deposit reserve policy, the rediscount policy and the open market operation, which have a great impact on China's economy. These three monetary policies have a great impact on our country.

These three tools are the three most commonly used tools by China's central bank, and they are also the most effective tools. It has played a very obvious role in regulating China's economy and has also aroused the attention of the whole society. Public market operations are the most commonly used tools.

Open market operations are the most commonly used tools in our country. Whenever there is a problem in the country's economy, the central bank releases a certain amount of liquidity to the market. Basically, liquidity is released through open market operations.

When the amount of funds in the market is large, a certain amount of liquidity will also be withdrawn through open market business operations.

Further information: 1. The content of the monetary system generally includes:

1) Stipulating monetary materials, i.e., determining which commodities can be used as monetary materials.

b) Specify the monetary unit, that is, specify the name of the monetary unit and the "value" of the monetary unit.

3) Stipulating the main currency and auxiliary currency: the main currency is the basic currency in circulation of a country, and the auxiliary currency is a small denomination currency below the main currency unit.

4) Free minting, restricted minting, that is, the provisions on the right to mint money under the circulation of metal money.

5) Limited and unlimited legal compensation, i.e., the extent to which money has the capacity to pay under the law.

vi) Preparation system.

2. The monetary system is mainly as follows:

1. The silver single standard is a monetary system with ** as the standard currency, with a long history.

2. The gold and silver double standard system is a monetary system in which gold and silver coinage are legalized as the standard currency at the same time.

3. The gold standard is a monetary system with ** as the standard currency, including the gold coin standard, the gold bar standard and the gold exchange standard. Gold standard: gold coins can be minted freely; Coins and bank notes can be freely exchanged for gold coins, and ** can be freely exported and exported into the country.

The gold coin standard: It is a relatively stable monetary system that has played a role in promoting the development of capitalism. But with the development of capitalism, the stabilizing factor of the gold standard was undermined.

3. Currency circulation.

1. The currency (currency) that will enter the circulation field can be distinguished from the standard currency and the auxiliary currency. The standard currency is a coinage minted in accordance with the monetary unit stipulated by the state, also known as the main coin. Auxiliary coins are small amounts of currency below the main currency, which are used for daily sporadic transactions and change.

2. The face value of the standard currency is consistent with the actual metal value, and it is a full-value currency, and the state stipulates that the standard currency has unlimited legal solvency. Countries that allow the standard currency to be freely minted and melted are not allowed to be put into circulation for the standard currency that is worn beyond the weight tolerance in circulation, but it can be exchanged for new currency at the designated institution, that is, the excess exchange.

3. Auxiliary coins are generally minted from base metals, and the actual value contained in them is lower than the nominal value, but the state stipulates that it is within a certain limit in the form of a decree. Auxiliary coins are only limited in legal compensation, but can be freely exchanged with the main currency. Auxiliary coins cannot be minted freely, only allowed to be minted by the state, and its minting income is an important part of the national fiscal revenue.

At present, China's monetary policy is to regulate the amount of various currencies by the first bank, affect the macro economy, raise the interest rate of sex loans, and curb the aggregate demand of society.

There are two models, one is a single goal, and the other is a dual goal, which refers to a stable currency and the other is the goal of developing finance.

The central bank will regulate and adjust the amount of money, which will affect the overall macroeconomy. In contrast, our monetary policy is very reliable.

Various policies and measures are taken to adjust the market interest rate by adjusting the amount of money used by various tools, and various policies and measures are taken to affect the capital investment of the private sector through changes in the market interest rate, and to affect the macroeconomic operation by affecting aggregate demand. The four major instruments of monetary policy to regulate aggregate demand are the statutory reserve ratio, open market operations and discount policy, and the benchmark interest rate.

When the economy is in a recession, it is necessary to encourage investment and consumption, and it is necessary to have a proactive monetary policy such as monetary policy easing, lowering interest rates, lowering the reserve requirement ratio, and increasing the amount of money.

View answer analysis [Correct answer] (1) Monetary policy is a macroeconomic policy; (2) the policy of monetary policy is a policy to regulate the aggregate demand of society; (3) The policy of selling money is mainly a policy that indirectly regulates the economy; (4) Monetary policy has the characteristics of combining long-term and short-term nature. （p251）

Answer analysis] The knowledge points of this question: the choice of monetary policy and monetary policy objectives

Summary. Monetary policy in developed countries usually has the following characteristics:1

Independence: Monetary policy institutions in developed countries usually have a relatively independent status and are not subject to direct intervention. 2.

Stability: Monetary policy in developed countries usually aims to maintain currency stability, and maintains the stability of the currency market by controlling inflation and stabilizing exchange rates. 3.

Flexibility: Monetary policy institutions in developed countries are generally highly flexible and able to adapt quickly to changes in economic conditions. 4.

Transparency: Monetary policy institutions in developed countries usually disclose the objectives, decision-making process and implementation of monetary policy to improve the transparency and fairness of decision-making.

The characteristics of the monetary policy of developed countries, combined with the actual situation of China, explain the advantages and disadvantages of China's current monetary policy.

The policy of Zheng buried in developed countries usually has the following characteristics: 1Independence:

Monetary policy institutions in developed countries usually have a relatively independent status and are not subject to direct intervention. 2.Stability:

The monetary policy of developed countries usually aims to maintain monetary stability, and maintains the stability of the currency market by controlling the inflation rate and stabilizing the exchange rate. 3.Flexibility:

Monetary policy institutions in developed countries are generally highly flexible and able to adapt quickly to changes in the economic situation. 4.Transparency:

Monetary policy institutions in developed countries usually disclose the objectives, decision-making process and implementation of monetary policy to improve the transparency and fairness of decision-making.

To sum up, China's monetary policy has made some progress in stabilizing the money market, promoting economic growth, and gradually realizing marketization, but there are still some problems that need to be further resolved. In practice, it is necessary to further improve the independence and stability of monetary policy institutions, strengthen the transparency and fairness of policies, and reduce the intervention of monetary policy to ensure the stability and sustainability of monetary policy. At the same time, it is necessary to pay attention to the changes in inflationary pressure and economic risks, take effective monetary policy measures, balance the relationship between monetary volume and economic growth, and avoid inflation or economic downside risks.

In addition, it is also necessary to strengthen the coordination and cooperation of the monetary impulse policy and the fiscal policy, improve the overall effect and stability of the policy, and promote economic development and social stability.