Environment Research Of China Monetary Policy Transmission

From 1998 until now, neither the expansion monetary policy nor the restriction one canworks as effectively as the central bank wished, which is the urgent problem facing the centralbank. The west monetary policy transmission mechanism theories are based on the perfectmarket environment, however, China is at the period of historical transition, which is the mainreason that limits the validity of monetary policy transmission in china.Firstly, this text summarizes the monetary policy transmission theories as the two majormonetary policy transmission channels, which is the monetary channel and credit channel; thetwo transmission mode, which is the economic variable transmission mode and economic subjecttransmission mode, as well as the transmission environmental condition theory. Secondly, underthe current situation that china is on the historical transition, it is concluded that the mainmonetary policy transmission in china is the banking lending channel and economic subjecttransmission mode. Thirdly, the text focuses on the analysis of the monetary policy transmissionenvironmental condition that affects the behavior of economic subject which are the central bank,commercial banks, enterprises and the inhabitants.Based on analysis above, the text finally proposed the suggestion of how to increase theefficiency of monetary policy transmission in china including the reform of state-owned bankand the state-owned enterprises system, establishing social credit system, social security systemand so on, in order to better realize the central bank's monetary policy target.