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Expectations that the U.S. Federal Reserve will launch another round of
bond buying this week are fueling speculation that China also may ease policy
soon to shore up its cooling economy.
But analysts say investors who bet on quick action from the People's Bank
of China could be disappointed, with only an outside chance that it would follow
the Fed's lead with more monetary easing of its own any time soon.
The best markets could hope for would be a further cut in banks' reserve
requirement (RRR), but the odds against such an imminent move or even an
outright interest rate cut are high as a recent flare-up in property and
consumer inflation overshadows the urgency of policy easing.
Moreover, unlike the 2008/09 global crisis, China's labor market is still
holding up well in part due to wrenching economic and demographic shifts.
Markets simply may have underestimated Beijing's tolerance of lower
economic growth this year, as long as the slowdown is not too abrupt and does
not spark social unrest ahead of a once-in-a-generation leadership change
expected next month.
The Chinese economy will slow further in the third quarter but regain some
momentum late in the year as the impact of earlier policy easing fully kicks in,
according to the latest Reuters poll of economists released on Wednesday.
Still, even if activity rebounds modestly in the fourth quarter, it would
drag full-year economic growth to below 8 percent, a level never seen since
1999.
INFLATION IN FOCUS
The central bank needs to tread carefully amid signs that its earlier
policy easing has fanned property price rises that have triggered public
anxiety.
That's probably why the PBOC has so far defied expectations for more
aggressive moves since its last interest rate cut in July. Instead, it is opting
to use reverse repos to inject short-term money into the banking system.
Housing prices, rebounded on a monthly basis for the second straight months
in July, following eight consecutive months of declines, while annual inflation
accelerated to 2 percent in August from a 30-month low of 1.8 percent in
July.
"The key dilemma for policymakers is that inflation looks like it will pick
up earlier than expected, while a growth recovery coming later than expected,"
said Yiping Huang, chief economist for emerging Asia at Barclays Capital in Hong
Kong.
"I think the central bank will probably do a little bit more (on easing),
depending on how the economy is doing. Realistically, the economy is going to
rebound but certainly not going to rebound significantly."
The PBOC may keep policy settings unchanged until the fourth quarter, when
growth may stabilize or even recover due to the lagging impact of policy
stimulus, according to government economist familiar with the policy-making
process.
"We don't expect any major changes in macro-economic policy in the run up
to the 18th Party Congress and the fundamental tone for monetary policy remains
prudent," Wang Jun, senior economist at the China Centre for International
Economic Exchanges (CCIEE), a Beijing-based think-tank, told Reuters. |
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发表于 2017-8-6 14:04:16