There has been a very interesting phenomenon of "capital depression" in the history of the world:17th century, a large amount of international capital poured into the Netherlands, and the Netherlands rose to become the most powerful country in Europe at that time; In the eighteenth century, a large amount of capital poured into Britain, and Britain became an empire that never fell; /kloc-in the 0 th and 9 th centuries, European capital poured into the United States, and the United States became the world's number one power. Although the flow of international capital has led to the rise of a country's economy, capital alone is not enough. More important than capital is an effective capital operation mechanism. /kloc-The rise of the Netherlands in the 0/7th century was short-lived, and it ended in "tulip bubble". If a country can't establish a healthy and efficient capital market system, it can't effectively use these capitals to create a strong real economy. In today's world, the game of capital market will directly affect the result of the game of big countries; The competitiveness of the capital market has become the strategic commanding height of the big country game in the new century.
The report believes that the pattern of excess international and domestic liquidity will continue for some time to come. In view of this situation, it is undoubtedly of great strategic significance to seize the opportunity, promote the reform, improve the mechanism, realize the rapid and healthy development of China's capital market, and build China's capital market into a market with first-class international competitiveness, thus effectively transforming domestic capital and international capital into a powerful real economy.
There are four negative effects.
Excess liquidity has many effects on the economy. First of all, in the macro economy, excess liquidity will lead to fluctuations in various asset prices, or asset bubbles. Once the excess liquidity is reversed, it may lead to a sharp decline in the stock market and affect macroeconomic stability.
Secondly, excess liquidity also affects the efficiency of resource allocation. For example, in the case of excess liquidity, some inefficient industries and enterprises can get the support of funds more easily, and the utilization efficiency of funds will be greatly reduced.
Thirdly, in order to use the funds, the loan interest rate may drop a lot when the bank lends money, or the security consideration may be relaxed when reviewing the loan, so there are certain potential risks.
Finally, if asset prices rise rapidly, currency depreciation may occur.
The "appreciation" of China stock market is actually the result of liquidity inflow and speculation in the international market. For example, China Life (40.20, 1. 17, 3.00%) expects its turnover in 2006 to be13.6 billion US dollars, which is only1%of AIG, the world's number one insurance company (1). Similarly, ICBC (5.53%, 0.04%, 0.73%) predicted a turnover of $23.2 billion in 2006, while the turnover of Citibank, which ranked first in bank market value, reached $89.2 billion, and that of Bank of America and HSBC, which were surpassed by ICBC, reached $72.9 billion and $63.7 billion. That is to say, the share prices of China Life Insurance and China Industrial and Commercial Bank have been inflated according to the traditional P/E ratio or P/B ratio.
Of course, the excess domestic liquidity is also related to the changes in China's economic situation in recent years and the actual economic conditions in China. In this regard, I think Lu Lei's analysis is more comprehensive, that is, the reason for the excess liquidity of China Bank (5.84, 0.04, 0.69%) system is that in the short term, after the shareholding system reform of state-owned banks went public, loanable funds suddenly increased; In the medium term, it is the expectation of RMB exchange rate appreciation that forms a RMB bubble, which promotes a large inflow of speculative capital; In the long run, it is the household savings rate that continues to rise.
First of all, although the United States began to tighten liquidity in 2004, and developed countries have successively entered the interest rate hike cycle, the current interest rate level in the United States is still at a historical low, and the interest rate in Japan has basically not changed the zero interest rate trend. If this pattern does not change, the situation of excess liquidity in the international financial market will not change much in the short term.
Secondly, domestic factors: First, the excess liquidity caused by the shareholding system reform and listing of the domestic banking system is inevitable. Construction Bank, Bank of China and Industrial and Commercial Bank of China have successively raised nearly 360 billion yuan from the market. Together with the capital injection of 60 billion dollars before listing, the newly-increased capital can increase loanable funds by nearly 4 trillion yuan according to the capital adequacy ratio, which is much larger than the new loans of domestic banks in 2006. In 2007, it will be a trend for domestic banks to be listed on the stock market, so it is unrealistic for the central bank to only hope to reduce the liquidity of banks by raising the deposit reserve ratio and issuing directional bills.
The second is the expectation of RMB appreciation. It is generally believed that the appreciation of RMB is due to China's high trade surplus and rapid growth of foreign exchange reserves. However, no matter from historical experience or general financial theory, RMB appreciation is neither a reason nor a way to reduce the rapid growth of foreign exchange reserves. On the other hand, judging from the historical debts of social security funds for urban residents and farmers, the serious debts of local governments and the huge non-performing loans of domestic banks, the RMB should not appreciate, but depreciate. As long as we look at the wealth possession and living standard gap between farmers and urban residents, we can see how much the country owes farmers. After deducting this large debt, is there any reason for RMB to appreciate? The government should have a clear understanding of this. Recently, a kind of "refinancing with the same name" has prevailed in domestic banks. In fact, whether it is an individual or a bank loan officer, it is nothing more than trying every means to get the bank's money into the hands of individuals and empty the country's wealth through various legal or illegal means. Because, in the end, the people of the whole country will definitely pay for the risks that may be brought about by this refinancing with the same name.
Third, the high domestic savings rate is determined by specific historical conditions, economic environment and demographic structure. The government hopes to use the policy of expanding domestic demand to reduce the household savings rate, which has been proved to be unworkable since 1998. Imagine that the current population structure of "42 1" in China cannot keep the savings rate rising. The only way to change the current high savings rate in China is to increase the investment channels that residents can choose.
In short, to solve the problem of "excess liquidity" in China, we must first stabilize the RMB exchange rate and completely weaken the expectation of RMB appreciation. Otherwise, the endless appreciation of RMB will definitely lead China's economy to a bubble first, and then to a recession after the bubble bursts. Although the data situation released at present is excellent, it is the result of high housing prices, and the housing price bubble will burst one day. Secondly, the government should consider how to form an effective financial market price mechanism and change the low interest rate policy under control, which is the core for the government to resolve the excess liquidity. It can be said that if the low interest rate policy is not changed, the situation of domestic excess liquidity will not be alleviated. Excess domestic liquidity is also a good opportunity to accelerate the pace of interest rate marketization reform. In addition, while changing the low interest rate policy, the government should weaken the internal conditions of RMB appreciation through various policies, such as marketization of factor prices and changing the policy orientation of foreign capital entry and foreign trade export.