5月31日，复旦大学经济学院院长、中国社会主义市场经济研究中心主任张军教授在Project Syndicate官网上发表文章：China's Monetary Conundrum.
报业辛迪加（Project Syndicate）被称为“世界上最具智慧的专栏”，作者来自全球顶级经济学者、诺奖得主、政界领袖，主题包括全球政治、经济、科学与文化塑造者的观点，为全球读者提供来自全球最高端的原创文章、最具深度的评论，为解读“变动中的世界”提供帮助。
以下为文章全文
Weak
demand is dragging down China's economic growth. The real problem isn't a
shortage of money: the broad money supply (M2) now exceeds CN¥155 trillion ($25
trillion), or 200% of GDP, and continues to grow by 12-13% annually. Rather,
the current slowdown reflects financial constraints on the real economy – a
problem that will be difficult to reverse in the near future.
Ironically,
these financial constraints have tightened against a background of strong
financial-sector growth. Indeed, it is the financial sector's prosperity,
driven partly by the success of market-oriented innovations, that has fueled
growth in China's M2 and credit assets.
This
trend can be traced back at least to 2004, when a fast-growing trade surplus
and massive capital inflows, as well as relentless exchange-rate appreciation,
forced the People's Bank of China (PBOC) to resort to monetary expansion as a
hedge against the resultant risks. Since then, China's unremitting investment
in infrastructure and real estate has fueled domestic demand, absorbing and
reinforcing this credit growth. In 2009, China took things a step further, with
a massive three-year stimulus plan that expanded bank credit to more than CN¥20
trillion.
As
the money supply and financial sector expanded, so did the shadow banking
system, which operates beyond the reach of risk-mitigating regulation.
According to data from Moody's Investors Service, by the end of last year,
credit from China's shadow banking system had nearly tripled relative to 2011,
to CN¥65 trillion. Since 2006, shadow banks’ share of total credit soared from
10% to 33%.
But
the trend toward riskier off-balance-sheet lending is visible within the
official financial sector as well, largely owing to the use of innovative and
weakly regulated wealth-management products that enable commercial banks to
bypass regulation.
Even
interbank loans, traditionally included on balance sheets, have been turned
into “interbank investment businesses,” which can exist off balance sheets. The
PBOC's 2014 Financial Stability Report showed that from the beginning of 2009
to the end of 2013, banking institutions’ interbank assets surged from CN¥6.21
trillion to CN¥21.47 trillion. That 246% growth rate was 1.8 times that of
total assets and 1.7 times that of total loans over the same period. Interbank
liabilities, meanwhile, grew by 236% – 1.7 times faster than total liabilities
and 1.9 times faster than deposit liabilities.
All
of this fueled rising risk across China's financial sector, while intensifying
pressure on the real economy. Indeed, the proliferation of interbank loans and
non-standard assets left a lot of money spinning within the financial system, instead
of being put to use in the real economy. Making matters worse, such funding
accumulated interest with every transfer, adding to the costs of shadow-bank
borrowing.
Of
course, banks enjoyed the easy profits from their off-balance-sheet business.
Indeed, those profits have encouraged them and their shadow-bank counterparts
to channel deposits into high-risk, high-return financial and real-estate
investments. This can fuel huge asset bubbles and market volatility.
The
stock-market crash of 2005 underscores these risks. At that time, the large
amounts of capital that were suddenly pulled out of the stock market poured
into real estate, with the increased leverage triggering a surge in urban
housing prices.
The
massive influx of money into the Chinese economy has also been used to invest
in technology start-ups. But, while China undoubtedly has an interest in
supporting innovative enterprises, the risk of a tech bubble is grave.
Last
year, data from China's Science and Technology Ministry showed that the number
of Chinese “unicorns” (companies that are less than ten years old, yet have a
valuation of over $1 billion) has soared above 130 – at least 30 more than in
the US. Given the rather low share of Chinese unicorns that fulfill their
promise, there is little doubt that China has a valuation problem.
The
bike-sharing start-ups that have penetrated major cities over the last year,
thanks to hundreds of millions of dollars in venture capital funds, amount to
another example of China's monetary conundrum. Such companies’ potential
long-term profits simply do not justify the valuations they are receiving.
Enabled by China's shadow banks, these companies seem to be burning cash, say,
by subsidizing customers in the hope of outlasting their competitors.
The
risks generated by these activities are not lost on the Chinese authorities.
The newly appointed chair of the China Banking Regulatory Commission (CBRC),
Guo Shuqing, has pledged to look more closely at banks’ off-balance-sheet
activities and conduct a rigorous audit of their risk assets. In the meantime,
China's securities and insurance regulators have cracked down on activities
like hostile takeovers.
Such
a crackdown will lead to short-term challenges. Already, regulatory tightening,
combined with the PBOC's macroprudential tools, has caused stock prices to
slide. It has also rocked the bond market, causing interest rates to soar, with
the default rate hitting unprecedented levels.
Yet I
believe that the Chinese authorities will plow ahead with their efforts to
strengthen financial regulation. They know all too well that a bank-dominated
financial system cannot weather a new and chaotic crisis.
But
the truth is that a regulatory crackdown, while necessary to mitigate financial
risk, will not resolve China's monetary conundrum, much less protect China's
economy from the consequences of a financial crisis in the long run. For that,
China will need to identify and encourage those financial innovations that can
support real economic activity. Unfortunately, on that front, not nearly enough
progress has been made.
