SMM4 16-month news: on Friday, the central bank released the March social and financial data M2 data, both rebounding, exceeding market expectations. Data show that China increased RMB loans by 1.69 trillion yuan in March, with a 2.86 trillion increase in social and financial scale in that month, and M2 rose 8.6% in March from a year earlier to a 13-month high!
Judging from the chart, the bottom of M2 has been formed, and the growth rate of 8% is the lowest in history. This stronger than expected rebound has confirmed the M2 historical low of 8%, which has brought great confidence to the market. At the same time, it shows that monetary policy is gradually becoming looser.
Since the beginning of the 21st century, M2 growth rate of more than 20% is common, the highest year 2009 M2 growth rate reached 28.5%, a large number of currencies to support the vigorous development of China's economy, at the same time, M2 / GDP ratio is also rising all the way. From 1 in 1996 to more than 2 now, this shows that the trend of economic monetization is becoming more and more serious, resulting in a large amount of overcapacity in the manufacturing sector and a sharp rise in the real estate market for 20 years. To put it bluntly, the great economic development since the new century is closely related to the emergence of the commercial housing market and the development of the international market after China's entry into WTO. M2 plays a role in adding fuel to the flames in this process, but with the gradual saturation of the real estate market and foreign markets, economic growth lacks a new growth point, and the correction of M2 is also natural. This is just a very normal phenomenon in the face of slowing economic growth.
It is an indisputable fact that China's economy has entered the new normal. Under the new normal, there is downward pressure on the economy, the growth rate of investment slows down, the growth rate of M2 slows down, the growth of consumption slows down, and under the new normal, the marginal effect of simple monetary stimulus is decreasing. The effect of monetary water release on the economy is getting weaker and weaker, so it is meaningless to release water again at this time. Releasing water will only make China's economy go further and further on the road of monetization, which is quite disadvantageous to the future economic development. What we need to do now is to find new sources of economic growth, rather than making a fuss about monetary policy. Without substantial economic development, M2 growth will become a rootless wood and a source of water.
