久久亚洲国产成人影院-久久亚洲国产的中文-久久亚洲国产高清-久久亚洲国产精品-亚洲图片偷拍自拍-亚洲图色视频

US EUROPE AFRICA ASIA 中文
Business / View

Time to replace financial repression with liberalization

By Wu Jiangang (chinadaily.com.cn) Updated: 2015-03-10 17:08

With entrenched vested interests and past history, government's effort to discard the old financial method will not be a smooth ride.

The phrase "new normal" reflects dramatic changes in China. However, it also implies that there is an "old normal".

The hope of change lies in that the present conditions of China's old model in economic growth no longer exist. There will be no choice but to move to a new model. Since finance is the core of modern economy, there is also a version of old normal and a new one.

As the old model of economy mainly depends on government investment, the government needs to mobilize enough funds. In such a case, for developing countries, the general financial policy is financial repression, which is exactly the core of China's old financial model.

The term financial repression was introduced in 1973 by Stanford economists Edward S Shaw and Ronald I McKinnon. It refers to "policies that result in savers earning returns below the rate of inflation" in order to allow banks to "provide cheap loans to State-owned companies and governments, reducing the burden of repayments".

China's financial repression consists of the following:

1 Government controls almost all banks and financial institutions.

2 Direct or indirect capping of interest rates, such as on government debt and deposit rates.

3 Creation or maintenance of a captive domestic market for government debt, achieved by requiring banks to hold government debt via capital requirements.

4 Most free social money is guided to follow into banks by restricting development of capital market products.

5 Government restrictions on the transfer of assets abroad by capital controls.

These measures allow governments to not only issue debt at lower interest rates but also acquire cheap and a lot of deposit to provide funds for government investment projects. A low nominal interest rate can reduce debt costs, while the negative real interest rates caused by inflation erode the real value of government debt. Thus, financial repression is most successful in mobilizing social money in government investments.

Government investment can help rapid expansion of State-owned enterprises to provide infrastructure and livelihood that people urgently need. But the model, if applied for a long time, can cause several severe problems:

1 The interest rates, as the most important prices for guiding money into profitable projects, are mispriced, which split the financial market into expensive private market and cheap State-owned market. The State-owned banking system, lacking competition, can hardly efficiently provide loans and services for profitable projects. This makes the society's most innovative SMEs difficult to acquire loans that are much needed.

2 Private banks' development, which is essential for SMEs, is seriously hindered.

3 The capital market, which is very important for modern economy, is seriously hindered.

4 The negative real interest rate has hurt the ordinary people's consuming power. These people's consumption elasticity is the highest and their consumption is important for the transition of economic growth model.

5 Excessive capital controls are harmful to efficiency of fund allocation and internalization of renminbi.

6 Government investments become the main rent-seeking fields.

7 Government-oriented rigid payment has distorted the expectation of capital return and further distorted the capital market.

Previous Page 1 2 Next Page

Hot Topics

Editor's Picks
...
主站蜘蛛池模板: 一级片观看 | 欧美国产精品 | 最新毛片久热97免费精品视频 | 成人免费网站视频www | 欧美一级毛级毛片 | 欧美高清强视频 | 午夜免费片在线观看不卡 | 国产精品免费_区二区三区观看 | 国产亚洲精品一区二区 | 国产成人精品aaaa视频一区 | 国产网址在线观看 | 91精品国产免费久久 | 中文字幕在线视频网站 | 国产午夜亚洲精品理论片不卡 | 99成人免费视频 | 波多野在线播放 | 中文字幕亚洲综合久久 | 在线观看精品视频网站www | 欧美大片国产在线永久播放 | 毛片免费在线播放 | 成人综合在线视频 | 久久精品视频播放 | 精品视频网 | 成年女人毛片免费视频 | 亚洲成在人线中文字幕 | 欧美日韩视频一区二区三区 | 久久精品国产99精品最新 | 成人欧美在线 | 免费看特级淫片日本 | av亚洲男人天堂 | 欧美色视频日本片免费高清 | 亚洲一区二区三区高清网 | 外国成人网在线观看免费视频 | 67194欧美成l人在线观看免费 | 国产在线观看高清不卡 | 国产欧美日韩在线一区二区不卡 | 久久久精品2018免费观看 | 成年人免费在线观看网站 | 鲁丝片一区二区三区免费 | 美女黄色免费在线观看 | 91av综合 |