Questo articolo è stato pubblicato il 29 novembre 2010 alle ore 17:03.
BEIJING – Not long after the United States Federal Reserve Board announced its second round of quantitative easing (known as QE2), the People’s Bank of China (PBC), China’s central bank, announced two increases of 0.5 percentage points in the required reserve ratio (RRR) of bank deposits. The RRR now stands at 18.5%, a historic high, even in global terms.
While the Fed is planning to pump more money into the US economy, the PBC is trying to reduce the amount of money in circulation in China. Money used by commercial banks to satisfy the RRR, which is held in accounts at the PBC, can no longer be extended as loans. As a result, more money than ever is now frozen or inactive in China.
It is understandable that the Fed wants to boost demand as long as the US economy remains depressed. But why has the PBC tightened monetary policy so much? The Chinese economy is not over-heating. Growth is still high, at about 10% per year, but has started to moderate. And, while inflation is a concern – having risen to 4.4% year on year in October, from 3.6% in September – this cannot explain why the PBC raised the RRR three times earlier this year, when inflation was lower.
Instead, the PBC’s policy is preemptive: sterilize over-liquidity and get the money supply under control in order to prevent inflation or over-heating. At the beginning of the year, the RRR increases could be regarded as part of efforts to correct the over-supply of money that arose from the anti-crisis stimulus package. But the most recent RRR increases serve mainly to sterilize the passive money supply caused by the increase in foreign-exchange reserves.
Indeed, in September alone, China’s foreign-currency reserves increased by almost $100 billion compared to August. With the global economy recovering, China’s trade surplus began to grow. Moreover, capital inflows increased significantly, owing to real investment opportunities in the high-growth economy and the expectation of renminbi revaluation.
But rapid growth in foreign-exchange reserves means an increase in the domestic money supply, because the PBC issues RMB6.64 (down 3% since June) for every dollar it receives. That means that money supply increase by nearly RMB700 billion in September. The two 50-basis-point RRR increases just locked up the same amount of liquidity.