China's Monetary Policy Intermediary Goal Orientation

Concerning on Monetary Policy' s effects directly, it is vital for the Monetary Beau to choose suitable intermediate targets. There is deep theoretical significance and wide practical value in researching intermediate targets' choice and developing trend.Intermediate targets' choice bases on Money theories and thetransmission mechanism. It has several technology standards -----measurable, available and relatedness and so on. All factors, for example the ultimate targets, economic situation and systems' reform, result in what the choice is.Before China' s reform and open, cash in fact is considered as the intermediate target. From 1979, the Monetary Beau chose cash and loan amounts scale as intermediate targets. In 1994, money supply has become the intermediate target of our nation.Recently, the effects of money supply as the intermediate target become weaker because of hardly controlled Monetary Base and unstable Money Multipliers, Income Velocity of Money lowing down and the transmission mechanism' s block, etc.Other selected variables can' t be the intermediate target for their unripe time and keeping money supply the intermediate target is true both now and in the early future.With the challenge of financial innovation and network finance, open expands wider than before and liberalization of interest rate, the feasibility of interest rate will rise. At that time the Monetary Beau should change its core intermediate target to interest rate. In addition, in transition period the Monetary Beau should not focus on one intermediate variable and should operate the basket of targets.