The Current Situation Of Chinese Liquidity And Its Impact On The Macroeconomic

With the 2007 U.S. subprime mortgage crisis transformed into a global financial crisis, world economic slowdown, assets fell sharply, consumer confidence declined sharply in response to the crisis. China and the rest of the world have adopted the policy of cutting interest rates, frequent, large injection scale, more tax cuts and increased public spending measures to stimulate the demand for recovery. From January 2009, the global economy has gradually started to heat up, China's economic growth bottomed out in the first quarter of 2009, and all the way up. Along with economic recovery, however, the phenomenon of excess liquidity began to appear, for example, M2/GDP is high, the actual money supply more than a balanced money supply and other monetary liquidity problems emerged, as the price index kept rising from 2010, central bank in January continued to tighten monetary measures, such as from January 6th 2010 until now the central bank has raised the deposit reserve ratio12 times, from October 2010 to July 2011 increased the deposit and lending rates five times. Continued implementation of prudent monetary policy have made our country's liquidity to be tighten in the second quarter of 2011, for example,broad money M2 growth rate has gradually declined.However, the overall economic situation is still maintaining the state of excess liquidity,the inflation pressures remain evident. This article just under this background, made a judge of liquidity status from the financial crisis until now. The writer think the liquidity situation is still of excess. Besides,this article analyzes the reason of excess liquidity,the influence to the macroeconomic, the countermeasures and advises to solve the problem.In the first chapter I introduce the analysis background and the significance of choosing this topic. Besides,summerize the research data of international scholar and domestic scholar. The second chaper use several indicators to measure Chinese liquidity situation and come out a conclution that our liquidity is in excess. The third chapter analyzes the reason of excess liquidity which includes three parts:the expensive policy of both domestic and internatioal; the high level of foreign exchange reserve;the unbalance of Chinese economic instructure. Chapter IV summarizes the impact of China's excess liquidity on the macroeconomic, including the impact of various price levels, includes inflationary pressures, high real estate market, and the impact of the banking system. Chapter V put forward strategies and recommendations, including implementation of tight monetary policy to reduce liquidity, to strengthen the construction of multi-level capital market to ease liquidity,and to guide the liquidity go to the real economy.