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China's fiscal and monetary policies.
Fiscal policy and monetary policy are important tools for the state to regulate macro-economy, and the coordination between monetary policy and fiscal policy will directly affect the implementation of the economy. In different economic situations, fiscal policy and monetary policy have different collocation patterns. In different periods, the central government will adjust the policy focus and policy means under the existing policy model, that is, vertical coordination; In a certain period of policy matching mode, * * * should not only adjust the policy itself, but also pay attention to the overall optimization of the policy matching system, that is, horizontal coordination.
Keywords: coordination of fiscal policy and monetary policy
Fiscal policy and monetary policy can be described as important policy means for the state to regulate and control the macro-economy. These policies mainly adjust the relationship between total social supply and total demand by implementing expansionary or contractive measures. They have their own strengths, but they should be closely linked. However, we must grasp and handle the relationship between the two, and coordinate the use of fiscal policy and monetary policy according to the actual situation, so as to give full play to their due role and ensure the stable, sustained and rapid development of the national economy.
At present, China regulates its currency through two important channels. First, banks buy government bonds and put money into the society through fiscal expenditure; The second is bank loan, which is also the main channel of money. Here, the financial increase in issuing treasury bonds to banks means that banks increase the money supply; Financial payment of treasury bonds issued to banks means that banks reduce the money supply. In other words, fiscal revenue and expenditure is not only the receipt and payment of social money, but also the redistribution of social money, and the scale of national debt issued by finance to banks is an important channel to adjust the total money supply. This is also an important manifestation of the close relationship between fiscal policy and monetary policy.
I factors of policy coordination and cooperation
national debt
National debt is the basic combination of fiscal policy and monetary policy. It is not only a way for finance to raise funds, but also provides an operating object for monetary policy to regulate the market. The restriction of national debt on the coordination of the two major policies is reflected in the following three aspects: First, 1 year national debt is the main tool for the central bank to operate in the open market, but there are many shortcomings in China's short-term national debt, which will affect the coordination between fiscal policy and monetary policy and the effect of macroeconomic policy. Second, the national debt market consists of three parts: exchange market, inter-bank market and counter market, which means that investors can't trade across markets, and these conditions also limit the liquidity of national debt. Third, according to the principle of reciprocity of financial market income and risk, the interest rate of national debt is the lowest in the market interest rate system. Due to the inflexibility of China's interest rate mechanism, it is not conducive to reflecting the supply and demand of social funds, thus affecting the coordination of fiscal policy and monetary policy.
2. Financial investment and financing
Financial investment and financing refers to a non-profit-making financial activity in which the financial department uses national credit to pool social idle funds and supports enterprises and institutions to develop production and undertakings through direct or indirect loans according to the economic and social development plan. This is another important combination of fiscal policy and monetary policy. Financial investment and financing can adjust and improve the economic structure, promote effective economic growth and enhance macro-control ability. However, at present, because there is no obvious scope between China's financial investment and financing and commercial bank investment and financing, and there is no restriction of relevant laws, policy financial institutions have penetrated into the financial business field of competitive commercial banks in pursuit of market share. On the one hand, it expands the "crowding out effect" of * * * investment on private capital and inhibits the investment of private capital; On the other hand, it increases the difficulty of monetary policy regulation, affects the coordination of fiscal policy and monetary policy, and increases the risk of local financing.
3. Foreign exchange reserves
At present, China's foreign exchange reserves are increasing at an alarming rate. However, doing so will bring many problems. On the one hand, at present, foreign exchange has become the main channel of China's basic currency, which has caused the liquidity problem of China's capital market. On the other hand, the central bank passively bought foreign exchange in the foreign exchange market, which forced the increase of foreign exchange reserves. At the same time, the real exchange rate of RMB deviates from the effective exchange rate more and more, and the RMB faces the dilemma of short-term appreciation and long-term depreciation.
Second, suggestions
Due to the constraints of the above factors, the regulatory role of fiscal policy and monetary policy is greatly reduced. Therefore, suggestions should be made for these factors:
1 Strengthen the management of national debt, and strengthen the coordination of fiscal policy and monetary policy in the management of national debt. First, enrich the variety of national debt and further expand the issuance scale of short-term national debt. Second, gradually abolish the regulations restricting commercial banks from purchasing treasury bonds, allow commercial banks to directly enter the treasury bond market on a large scale, break the division of the treasury bond market and establish a unified treasury bond market. Third, gradually adjust the interest rate structure of national debt, change the long-standing situation of high interest rate of national debt and low interest rate of financial products such as bank savings deposits, enhance the interest rate flexibility of national debt, and accelerate the marketization of interest rates.
2. Promote the reform of financial investment and financing system and build a scientific and reasonable investment and financing framework system. In terms of financial investment and financing, it is necessary to formulate corresponding legal norms and clarify the principles, scope and fields of financial investment. In the scientific investment and financing system, financial investment and financing should strengthen public welfare growth, should not interfere with and influence the choice and preference of private investment, and should not carry out venture capital. In order to prevent financing risks, it is necessary to strengthen the management of local investment and financing platforms and improve the investment and financing efficiency of local * * *. These are the inherent requirements for building a long-term planning, overall arrangement, orderly planning and risk-controlled investment and financing framework system.
Adhere to the market-oriented reform of exchange rate, further enhance the initiative of fiscal policy and monetary policy, and maintain the current account and capital account surplus of international payments. However, this model contains huge risks. In order to guard against this risk, it is a very difficult problem for China's macro-economy to adjust and balance the balance of international payments and internal and external economy. To break this pattern, we must adhere to the marketization of exchange rate formation mechanism and reform the foreign exchange management system. Although this will make China face the expectation of RMB appreciation in the short term and lead to a large amount of foreign exchange inflows, in the long run, the market-oriented exchange rate formation mechanism will increase the initiative and independence of monetary policy. From a further perspective, we should change the mode of economic growth and expand domestic demand. Through the above methods, the international balance of payments will be gradually achieved, thus reducing the pressure on foreign exchange and related constraints, so that monetary policy can be effectively implemented and better coordinated with fiscal policy.
In a word, fiscal policy and monetary policy, as two basic policy means of national macroeconomic regulation and control, have different regulatory emphasis and means, different regulatory influence and scope, and are closely related and interactive. Only by correctly understanding and accurately handling their relationship can they give full play to their due positive role.
References:
Huang Yajun. Macroeconomics second edition [M]. Higher Education Press, 2007.
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[4] Ren Biyun. Technical Path of Coordination between Monetary Policy and Fiscal Policy in China [J]. Economic Problems in China in 2009.
[5] Wang Tongsan, Wang Chengzhang.21Century Quantitative Economics [M]. Southwest Jiaotong University Press, 2005.
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