Reform Of China's Money And Credit Statistics

It has been more than60years since the People's Bank of China firstly compiled and published economic data. In order to assistant with the formulating and performing of monetary policies, the central bank also set up money and credit statistics, which comprise of monetary aggregates, balance sheet and survey, sources and uses of credit funds and so on.However, China's money and credit statistics cannot keep pace with the speedy development of economy--RMB regionalization and internationalization have accelerated the overseas circulation of currency, which can't be monitored by monetary statistics of China; The widespread use of payment technologies results in that different types of transaction accounts have shifted rapidly and unpredictably. Increased reliance on electronic money as a substitute for currency will directly affect China's monetary aggregates; Driven by financial innovation, China has witnessed the enrichment of financial instrument as well as the perfection of financial market system, which raises new requirements on the higher level of monetary aggregates; Aggregates financing of the economy (AFE) were brought in by People's Bank of China and discussions were triggered as for whether to use it as an intermediate target of the monetary policy--The deficiencies of money and credit statistics have even influenced the monetary policy decision-making process, so that it is an urgent task for the reform of it.Like every coin has two sides, the development of economy brings risks as well as benefits. This paper sets forth the research framework under those new circumstances, which can be summarized as currency internationalization, financial computerizing and financial innovation. We focus on four main aspects: currency internationalization and its impact on monetary statistics; the proper classification of electronic money for monetary statistics; the financial instrument which constitutes the higher level of monetary aggregates; the application of AFE and its extension. This thesis improves the current study about the reform of China's money and credit statistics in three ways.Firstly, the paper gives a set of guidelines for compiling monetary and financial statistics. Those guidelines are harmonized with Monetary and Financial Statistics Manual as well as Monetary and Financial Statistics Compilation Guide, but a more detailed volume about currency internationalization, financial computerizing and financial innovation, along with deeper understanding of the relations between the various statistics.Secondly, the study puts forward a proposal for a new monetary aggregates measurement of China. Monetary aggregates of China were originally introduced in1994and have been amended for three times thereafter. This paper examines the evolution of monetary aggregates of China and gives some improvement advises. Compared with the existing money supply, the new measurement is more comprehensive, continual, flexible and comparable across countries.Thirdly, the thesis restudies on the statistics of aggregates financing of the economy (AFE). We compare AFE with broad money (BM) from the view of national accounting, and then investigate their relationship with GDP and CPI by econometric analysis. The results show that AFE is not a good replacement for BM as an intermediate target of the monetary policy in China. However, AFE can serve as a counterpart of BM, which reflects the demand for loanable funds. The paper conceives a plan to extend AFE.