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"Policymakers have drawn a lesson from the past and don't want to stimulate
economic growth aggressively," he said, referring to concerns that too much
stimulus could re-ignite inflationary pressures.
The 18th Communist Party Congress, at which China's next top leaders are
likely to be unveiled, is set for October.
Under the banner of policy 'fine-tuning", the central bank cut interest
rates twice in June and July and lowered banks' reserve requirement ratio (RRR)
three times since late 2011, freeing an estimated 1.2 trillion yuan for boosting
loans.
"The chances of policy easing are slim in the near term, but we cannot rule
out a cut in RRR or interest rates," said You Hongye, an economist at China
Essence Securities in Beijing.
SURPRISE?
Predicting the timing of China's monetary policy moves can be a daunting
task given the central bank does not hold regular policy meetings as its
counterparts in the West, and it has a track record of surprising the
market.
One, albeit slim possibility is that the China may opt to cut banks'
reserve requirements or rates as part of a globally coordinated policy action to
shore up the world economy, especially if the Federal Reserve launches a third
round of quantitative easing, or QE3 after a two-day meeting ending on Thursday
to spur the U.S. recovery.
China, the euro zone and Britain loosened monetary policy within less than
an hour of each other in early July, signaling a growing level of alarm about
the world economy. China's move was a surprise, though suggestions of any
coordinated action were played down.
Unlike its counterparts in the West, the central bank still has plenty of
room to cut borrowing costs. The benchmark one-year bank lending rate is at 6
percent while one-year deposit rate is at 3 percent, while the RRR level remains
at 20 percent -- among the highest in the world.
Peng Wensheng, chief economist at CICC, still expects one or two cuts in
RRR and another interest rates cut by year-end.
NO URGENCY
As long as the labor market holds up, economists say Beijing will not be
overly concerned about a growth slowdown.
China launched a massive stimulus plan four years ago after at least 20
million Chinese lost their jobs in a matter of months as world trade ground to a
halt.
But the labor market has proved to be more resilient this time round, with
economists pointing to an expanding service sector, which is diversifying growth
away from the vulnerable export sector and creating plenty of new jobs.
While expectations of central bank moves have been dialed back, investors'
focus has shifted to prospects for more fiscal stimulus measures, which already
are gaining pace.
Last week, the National Development and Reform Commission announced that it
had approved over $150 billion worth of infrastructure projects, but analysts
remain skeptical about any quick impact on economic growth as the projects still
need time to get funding and start construction.
Premier Wen Jiabao said on Tuesday that Beijing was in fiscal surplus of
about 1 trillion yuan ($157.9 billion) in the year to date and if needed the
government could utilize a 100 billion yuan fiscal stability fund to boost
growth.
Wen also said the economy remains on track to meet the government's annual
7.5 percent growth target.
China still created 8.1 million new jobs during the first seven months of
2012, up 5 percent from a year earlier, he added. The tally was 90 percent of
the annual target of 9 million set by the government at the beginning of the
year.
"They don't really have any urgency (in policy easing) at this point. They
keep the power dry and they will respond if things get worse," said Tim Condon,
head of Asia research at ING in Singapore.
"The economy is not doing great, but it's not doing that badly." |
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发表于 2017-8-6 14:04:15