Yi Gang Talks About The Medium And High Speed Growth Of China'S Economy In The Future

Today is the solar terms of the 24 solar terms in China.

The people's Bank of China decided to start today's "double reduction" of the benchmark interest rate and deposit reserve ratio of financial institutions.

I believe you are all very concerned about China's economic situation. Let me give you an introduction here.

According to newly released figures, China's GDP grew by 6.9% in the first three quarters of this year.

I looked at the contribution of China's economic growth to the world's economic growth over the past 5 years and the past 10 years.

There are two methods of calculation, one is exchange rate conversion, the other is PPP purchasing power parity.

Many authoritative institutions, including the world bank, IMF and OECD, are doing calculations.

Despite the slight difference between the two methods, China's contribution to world economic growth is about 1/3 in the past 5-10 years.

The total amount of GDP in China has exceeded 10 trillion US dollars. It is precisely because China's economic growth has made a great contribution to the whole world that everyone is very concerned about China's economy.

In short, there is a gradually improved interest rate system from the money market to the bond market fixed income products, and then to the credit market. The pmission mechanism from the central bank's interest rate control mechanism to the market interest rate is gradually improving.

The liberalization of deposit interest rate limit is not only the basic liberalization of administrative control interest rate, but also the beginning of a new stage of interest rate regulation.

In the new stage, interest rate tools, as the price of whole society financing, will play an extremely important role in the process of market allocation of resources.

The liberalization of interest rate control will be more conducive to independent pricing of commercial banks, and more conducive to effective competition in the entire financial market, and thus more conducive to effective allocation of financial resources.

The liberalization of interest rate control also provides new support for the bargaining risk of SMEs and the "three rural" financing risks and the independent pricing of banks, which makes the financing channels more open and can better support the weak links of these economic development.

I believe that China's economy has entered the "new normal", that is, from the past high-speed growth period to the medium and high speed growth period, it will have the following characteristics: first, economic growth will be driven mainly by consumption.

The contribution rate of consumption to economic growth in domestic demand may be the largest, rather than the largest contribution rate of investment as in the past.

Consumption will become more and more important in the new normal.

In fact, the contribution of consumption in the "three carriages" has been increasing this year.

Second, the biggest industry will shift from manufacturing to service.

This is a very important pformation.

Third, China will attach great importance to energy conservation and environmental protection.

We have made a commitment to climate change.

As the largest developing country, China will make great efforts in such aspects as climate change, environmental protection, energy conservation and emission reduction, and reducing energy consumption per unit GDP.

Energy conservation and environmental protection will be an important driving force for China's economy.

Fourth, China will pay more attention to social security.

Our social safety net will be more and more reliable, that is, "bottom line", including retirement, pension, medical care, rural medical care, minimum living allowances, care for the disabled, etc.

Fifth, innovation driven.

Economic growth will be pformed from reliance on investment and resource consumption in the past to more dependent on human resources.

We have seen the recent wave of "mass entrepreneurship and innovation", with more than ten thousand companies registered every day, and new products are also springing up.

How fast will China's economy grow in the next 3 years, 5 years or even longer? I believe it will still be faster.

I think the speed at which we are talking about 7% or six percent points is still certain.

Where does this grasp come from? The two most important driving force for growth.

The first driving force is new urbanization.

The process of urbanization in China is not over yet.

The current urbanization rate is only about 55% of the permanent population, and is lower according to the household registration population.

If the rate is one percentage point a year, it will take more than 10 years from 55% to 70%.

This will bring impetus to the growth of China's economy.

Another very reliable driving force for growth is reform and opening up and decentralization.

Reform and opening up, decentralization and decentralization are actually emancipating the productive forces and increasing productivity.

The measures of reform and opening to the outside world will be reflected in the improvement of total factor productivity in the economy, reflecting the improvement of labor productivity, so efficiency will be improved.

Therefore, I have confidence in China's economic growth in the future.

The people's Bank of China decided to start today.

"

"Double down" means that we have reduced the benchmark interest rate of deposits and loans by 0.25 percentage points, and at the same time reduced the deposit reserve ratio, including a 0.5 percentage point reduction in the deposit reserve ratio of financial institutions, and an additional reduction of 0.5 percentage points for financial institutions supporting the "Three Rural" and small and micro enterprises to meet certain conditions, which is based on universal reduction and directional reduction.

It should be said that in the face of the pressure of China's economic downturn and the relatively low price situation, monetary policy has made targeted adjustments to support the real economy.

We have lowered interest rates several times. We can see that in fact, the cumulative effect of monetary policy is emerging.

The people's Bank of China is very concerned about the trend of China's real interest rate.

Now the consumer price index (CPI) is relatively low, only 1.6%.

The GDP deflator is around zero, which is also very low.

In addition, producer price index (PPI) increased negatively for 43 consecutive months.

In this policy, there is a very important aspect, that is, we have liberalized the upper limit of floating interest rate.

What about the formation mechanism and regulation mechanism of interest rate after releasing the upper limit? The liberalization of the deposit interest rate limit only abolished the administrative and administrative requirements of the deposit interest rate, which does not mean that the central bank has weakened the interest rate management. Instead, the central bank will strengthen the regulation of market interest rates.

Liberalization of interest rate administrative control is China's interest rate

A milestone in the process has been achieved, but it has also opened a new stage in which interest rate regulation and price instruments will be more important.

Although quantitative tools are also important, China's market is becoming more and more connected with the world. The whole Chinese economy is integrating into the global economy. The foreign exchange market has both onshore and offshore markets, and capital account convertibility is more convenient.

In such a big environment, price leverage and interest rate policy will surely become more and more important.

From this perspective, the reform of interest rate marketization has entered a new stage. The core is to establish and perfect the interest rate formation mechanism and regulation mechanism that fits the market, and improve the effectiveness of the central bank's regulation of market interest rates.

Let me briefly explain this interest rate framework.

First of all, we have a central bank's interest rate system.

We conduct open market operations every week to guide short-term interest rates.

The most important short-term interest rates are the overnight interest rate and the 7 day repo rate.

China also began to cultivate interbank offered rate (Shibor) in Shanghai in 2007.

These interest rates are gradually becoming the benchmark and basis for monetary market pricing.

At the same time, the progress of China's yield curve in recent years is very fast, and it is becoming more and more reliable.

From overnight to less than one year to more than a year, the whole yield curve is gradually improving.

Recently, China's Ministry of finance began rolling out three month short term bills. The interest rate of short-term financial bonds increased and the volume of pactions increased, making interest rate pricing more fundamental.

For the guidance of longer term interest rates, the central bank has interest rates for re lending and all kinds of re lending instruments, such as the medium-term convenience lending rate and mortgage supplementary loan interest rates.

These refinancing rates will also affect the entire interest rate system.

At present, the people's Bank of China has initially constructed a regulation system from overnight to long-term interest rates.

Of course, the experience of foreign central banks is to focus on short-term interest rates.

But in China, because of the historical evolution, people have become accustomed to the benchmark interest rate of deposit and loan. Therefore, after liberalization of interest rate control, we will continue to publish the benchmark rate of deposit and loan for a period of time to provide reference for the market and commercial banks.

Next, the market.

。

As mentioned just now, interest rate in money market is an interest rate system based on overnight and 7 day repurchase and Shibor, mainly from overnight to one-year interest rate.

At the same time, China's yield curve has been relatively perfect, and the function of application and pricing in fixed income products and other markets is increasingly obvious.

In the past, some points in the yield curve did not trade, and the other pactions were smoothed out.

At present, the pactions on each point of the yield curve are more intensive than in the past, so the whole yield curve is more reliable.

In the loan market, there is a loan base interest rate (LPR), which is one of the benchmarks to guide commercial banks to make loan pricing.

While liberalising the ceiling on deposit interest rates, we must pay close attention to possible risks.

For financial institutions, the risk of high interest collection and savings war is mainly monitored by internal governance structure, internal control mechanism, self-regulation organization and external supervision. At present, the self regulatory organizations in various regional markets and national markets have played a positive role, and the statistics and regulation of the central bank and financial supervision departments are also constantly strengthening.

We also need to resolutely crack down on illegal fund-raising, which requires the broad masses to keep their eyes on the ground. They also urge the relevant departments to remind them in a timely manner that they should be able to contain risks in the early stage and find them together.