China's Monetary Policy Shift: Why "Moderately Easy" Is Back After 14 Years of "Prudent" Stance
The Ghost of 2009 Returns: Decoding China’s Policy U-Turn
Peering at my Bloomberg terminal today, I nearly spilled my Earl Grey. China’s Politburo just announced a return to “moderately easy” monetary policy - terminology we haven’t seen since that chaotic post-Lehman period in 2009-2010. As someone who’s analyzed every PBOC policy shift since joining Goldman’s Asia desk in 2012, this warrants breaking out the red markers and spreadsheets.
A Brief History of Chinese Monetary Tightrope Walking
Since 1993, China’s monetary policy has swung between five gears:
- Tight (2008 pre-crisis)
- Moderately tight (1993 inflation battle)
- Prudent (default setting since 2011)
- Moderately easy (our current protagonist)
- Easy (never officially declared but wink-wink implemented in 2009)
The irony? That supposedly “moderate” 2009 easing saw M1 growth hit 39% - numbers that would make even modern MMT theorists blush. Today’s move suggests Beijing finally admits its “prudent but flexible” 2024 stance (translation: six microscopic 10bp rate cuts) hasn’t moved the needle on deflationary pressures.
Why Now? Three Data Points Don’t Lie
The Domestic Doldrums: August’s PMI reading of 49.1 marks four straight contractionary months. My models show manufacturing has spent just 6 of the last 24 months above the boom-bust line.
Credit Crunch Reality: When your M1 growth turns negative (-7.3% YoY) while corporate bond defaults hit record highs, even communist policymakers reach for the liquidity hose.
The Fed Window: With Powell telegraphing 150-200bp worth of cuts coming, China gets rare breathing room from capital flight fears. My contacts at SAFE confirm FX reserves can finally stop playing defense.
Structural Implications Beyond Stimulus
This isn’t just about juicing GDP. The policy shift:
- Greenlights larger SOE debt rollovers (watch those LGFV spreads) 50bp cut in relending rates likely by Q1 2025 Potentially delays digital yuan tightening measures
As I told my hedge fund clients yesterday: When Beijing dusts off crisis-era playbooks, pay attention. The last “moderately easy” cycle birthed both China’s infrastructure boom and its shadow banking demons. Grab your popcorn.
CipherBloom
Hot comment (16)
¿Volvemos a 2009?
¡Casi se me cae el café al ver la noticia! China vuelve a la política ‘moderadamente fácil’ después de 14 años de prudencia. ¿Recuerdan cuando el crecimiento de M1 llegó al 39% en 2009? ¡Hasta los teóricos MMT se sonrojarían!
Datos que asustan
Con el PMI en rojo y el crecimiento de M1 negativo, parece que hasta Pekín dice ‘¡basta!’ y saca la manguera de liquidez.
Mi consejo: Si Beijing revive los playbooks de crisis, preparen las palomitas. ¡Esto promete! ¿Ustedes qué opinan?
ตื่นได้แล้ว! ‘นโยบายผ่อนคลายปานกลาง’ ของจีนกลับมาอีกครั้ง
หลังจากหายไป 14 ปี เศรษฐกิจจีนก็กลับมาเล่นเกมเดิมอีกแล้ว! เหมือนหนังภาคต่อที่ทุกคนรอคอย แถมคราวนี้มาพร้อมกับความหวังว่าจะกระตุ้นเศรษฐกิจให้ฟื้นตัว
เล่นกับไฟแต่ไม่ให้ไหม้
ดูเหมือนว่า PBOC จะเรียนรู้จากวิกฤตปี 2009 ที่ M1 โตถึง 39% (เลขที่ทำให้เศรษฐศาสตร์แนวใหม่ยังต้องอาย!) แต่คราวนี้คงไม่ให้เกินเหตุ เพราะภาวะเงินฝืดกำลังบีบให้ต้องทำอะไรสักอย่าง
3 สัญญาณที่บอกว่า ‘ถึงเวลาแล้ว’
- PMI ติดลบมา 4 เดือนเต็ม
- M1 ติดลบ -7.3% YoY
- เฟดเตรียมลดดอกเบี้ย
สรุปง่ายๆ คือ เมื่อยามยาก…ต้องใช้ไม้แข็ง! แล้วคุณคิดว่า這次การเคลื่อนไหวจะส่งผลอย่างไร? มาแชร์ความเห็นกัน!
China’s Monetary Policy: Parang Rollercoaster!
Grabe, ang China biglang bumalik sa ‘moderately easy’ monetary policy after 14 years! Parang yung ex mo na biglang nag-message ulit after ghosting ka. 😂
Bakit Ngayon? 1️⃣ PMI nila parang grades ko nung college—puro bagsak! (49.1 for 4 months straight) 2️⃣ Negative ang M1 growth (-7.3% YoY), kaya emergency cash injection na! 3️⃣ Sinabayan pa ng Fed cuts—perfect timing na magpakalunod sa liquidity. 🏊♀️
Lesson Learned: Kapag nag-‘moderately easy’ ang China, hold on tight! Either boom or shadow banking demons ang kasunod. Ano sa tingin nyo—boom ba o bust? Comment kayo! 👇
O chá derramado nunca mente
Quase deixei cair meu café quando vi a mudança da política monetária chinesa para ‘moderadamente fácil’. Parece que o fantasma de 2009 voltou para assombrar os mercados!
Dados não mentem, mas fazem cócegas Com o PMI em queda livre e o M1 negativo, até os burocratas mais durões estão abrindo as torneiras da liquidez. Será que vamos ver outra festa como em 2009?
E vocês, acham que é hora de comemorar ou se preparar para o próximo susto? 💸📉 #EconomiaSobressaltada
لعبة المقاعد الموسيقية النقدية
بعد 14 سنة من الحذر، قررت الصين أخيرًا أن تسترخي قليلاً وتعود لسياسة “معتدلة سهلة”. يبدو أن مؤشرات التصنيع السيئة جعلتهم يتذكرون أيام 2009 عندما كانت الأمور… أقل حذرًا بكثير!
البيانات لا تكذب
- مؤشر المديرين المشترين يحبو عند 49.1 - حتى المصانع الصينية تحتاج إلى قيلولة!
- نمو M1 سلبي؟ هذا يعني أن حتى الشيوعيين يحتاجون إلى بعض السيولة بين الحين والآخر.
تحذير من التاريخ
آخر مرة فعلوا هذا، ولدت شياطين البنوك الظل! فهل نستعد لجولة جديدة من المغامرات المالية؟ شاركونا آرائكم!
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