GF 323
CONFIDENTIAL
11
機密
19.
refers
In
China's
economy, tighter monetary policy
mainly to a tightening of direct credit allocation, although the government can also exercise greater control over the issuance of bonds and shares by enterprises.
Other monetary policy tools including changes in reserve ratio, open market operations and interest rate adjustments
either inefficient
or non-existent in the
are
country(13). In general, the People's Bank of China, as
the
central bank, assigns quotas to the various specialised banks thereby controlling the overall volumes of their
lending. Enforcement is accompanied by directives and moral suasion. But the problem is that, as the specialised banks at the provincial level are also subject to the political influence of the provincial authorities, they may not always follow strictly the policy guidelines laid down by the central bank. Besides, they are obliged to extend
loans to those state-owned enterprises which have
persistent financial difficulties. There is, moreover,
tendency for the banks to overlend, for the sake of
maintaining or. enlarging their future credit quotas.
Another significant factor that tends to undermine the
central bank's move to control credit is that many of the
enterprises are now in a sound financial
position and are able to finance a larger part of their investment projects from internal resources as opposed to
non-state-owned
a
(13) Interest rates in
Bank of China and
China are fixed by the People's revised relatively infrequently. The revisions made to selected interest rates since 1990 are as follows:
As from
Interest rate on savings deposits
(*)
Interest rate on 1-year time _deposits
Base lending
rate on commercial
loans (%)
(응)
1 Jan 1990
2.88
11.34
15 Apr 1990
2.88
10.08
21 Aug 1990
2.16
8.64
21 Apr 1991
1.80
7.56
11.34
10.08
9.36
8.64
remained
機密
Note : The
various interest rates have
unchanged since 21 April 1991.
CONFIDENTIAL ##
No comments yet.
Private notes are available after approval.