Since 1996, China has adopted a series of expansionary monetary policies, including cutting interest rates seven times, lowering the deposit reserve ratio twice, canceling the loan scale management that has been implemented for many years, and vigorously advocating consumer credit. In the monetary field, the growth rate of money supply at all levels decreased, the liquidity of money weakened, and the speed of money circulation continued to slow down; In the whole economic field, the effective demand is insufficient, the commodity market is generally surplus, the economic growth rate is declining year by year, and the price level continues to fall after 1997 10 months.

After 200 1, China began to implement a prudent fiscal policy and a prudent monetary policy until 2007.

According to the summary of the People's Bank of China, the contents of a prudent monetary policy are: appropriately increasing the money supply and increasing support for economic development; Through the central bank's policies, regulations and window guidance, guide commercial banks to invest in loans and improve the efficiency of the use of credit funds; Strengthen the supervision of banks, promote the institutional renewal of commercial banks, and create conditions for effectively transmitting the central bank's monetary policy.

Since 2008, due to the overheating of economic growth, the state began to make the economy soft landing to prevent overheating from forming a bubble. We began to implement a prudent fiscal policy and a tight monetary policy.

Faced with the dual pressures of inflation and economic slowdown in China, we should adopt a flexible and tight monetary policy to avoid a "hard landing" of the economy. Monetary policy is still tight, but it should be flexibly adjusted according to the actual situation of economic operation to prevent excessive tightening, and prudent interest rate hikes can be implemented. The current credit control has greatly increased the capital cost of enterprises, and further interest rate hikes may have a great impact on the economy. At present, the demand is weakening, some enterprises have difficulties in operation, investment is declining, and domestic demand is sluggish. At this time, it is necessary to adopt a moderate monetary policy and expand the scale of investment to start domestic demand.

In 2009, China implemented a moderately loose monetary policy and a proactive fiscal policy.

This year's central bank work conference, which closed on June 6, 65438, laid the basic idea of implementing moderately loose monetary policy in 2009. The meeting particularly emphasized the need to give full play to the role of direct financing and private financing, and released the signal that a credit policy aimed at broadening credit channels, increasing capital supply capacity and appropriately increasing the total credit supply will be implemented.

In fact, private financing such as financing through guarantee companies, fund-raising, underground bank lending, and even usury and private lending has existed in some areas to varying degrees, and some small and medium-sized enterprises have to raise funds in this way for emergencies. The central bank clearly put forward and stressed that we should give full play to the role of private finance, let small and medium-sized enterprises obtain private capital through private finance, and even publicly borrow funds through channels that were not allowed or encouraged before, which may expand the credit channels of small and medium-sized enterprises to some extent and alleviate or solve the problems of financing difficulties and capital shortage of small and medium-sized enterprises.

The research report published exclusively by the National Information Center in china securities journal in June this year 10 holds that the current monetary policy should continue to be moderately loose, but neither the interest rate nor the deposit reserve ratio should be greatly adjusted. At the same time, monetary policy needs to deal with the potential stagflation risk in advance.

According to the report, influenced by the price trends of energy and raw materials, the CPI of China may rise to the long-term average level before GDP in the future. It is expected that from the third quarter of this year, the pace of change from deflation to inflation will accelerate.

The report believes that the current interest rate and deposit reserve ratio should not be greatly adjusted, but should be stabilized in a suitable range. Cutting interest rates is not the first choice of the central bank's monetary policy tool. Open market operation and fine-tuning of monetary policy are more effective measures than reducing interest rates. At the same time, the central bank needs to expand the issuance of central bank bills and stabilize the deposit reserve ratio to hedge the rapid growth of foreign exchange holdings.