Tapping excess capital in China’s banking system

WANG Guogang ( 王国刚 )
Financial Research Institute, Chinese Academy of Social Sciences

Abstract:
Excessive liquidity seriously affects Chinese economy. Thus, various policy proposals have been submitted by some
scholars. The author holds that whatever form it may take, reducing trade surplus would harm China’s economic
development. On the other hand, it is difficult to boost domestic consumption by increasing the resident spending on
food, clothing etc. In order to consolidate the policy of domestic demand, it is important to separate production and
non-production investment and create better economic conditions by accelerating the development of non-production investment and increasing the supply of “housing, traveling and education” related consumption.
Key words: China’s banking system; Excessive liquidity; Countermeasure analysis

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