A Study On Excess Liquidity Of China

As a developing country, China was always facing a shortage of fund and liquidity. However, since the 21st century, the excess accumulation of liquidity comes quietly like a ghost, and quickly becomes the focus of various problems in the macroeconomy of China in just a few years. Research on the management of excess liquidity has become a major task in China's macroeconomic control.This thesis comprehensively summarizes various theories on excess liquidity in domestic and international literatures, identifies its causes and adverse impact, and proposes novel monetary policies to control it. The whole thesis consists of four parts. Part I introduces the background and significance of excess liquidity on the economy of China, illustrates the content and logic framework of this study, and explains its importance, novelties, and difficulties. Part II describes the concepts of liquidity and excess liquidity, reviews the Chinese and international literatures on the excess liquidity in China, analyzes the evolving history of liquidity management theories, and builds a theoretical foundation for further analysis, identifies the causes of excess liquidity From the international and domestic. Part III describes continuously increasing bank deposit surplus, "Loan-to-deposit ratio" declining, rapid growth of money supply, Low required reserve ratio, Rapid increases in asset prices, skyrocketing real estate and stock market with concrete data, and illustrates the adverse impacts of excess liquidity on the macroeconomy and Microeconomic management. Part IV comprehensively analyzes current monetary policies of central bank, and proposes novel policies and specific strategies to strengthen the risk management of liquidity in commercial banks in China, such as Actively promote reform of the management system of foreign exchange, reforming foreign currency reserve management system ,Change mode of foreign trade growth, optimize the structure of import and export commodities, Determine a reasonable economic growth targets, The development of appropriate currency regulation and control targets, To accelerate the pace of development of the financial markets, effectively broaden the investment channel, Increased public expenditure, improving the social security system, Increased public expenditure, improving the social security system.