An Analysis On The Validity Of The Credit Transmission Mechanism Of Monetary Policy In China

Transmission mechanism of monetary policy is the monetary authorities usingvarious monetary policy tools, directly or indirectly, controling the money supply,thereby acting on the path of economic entities and methods; its smooth or not willdetermine the implementation of monetary policy effectiveness. In general, themonetary policy will be transmitted through interest rate channel, asset price channel,the exchange rate channel and credit channel to achieve the desired macroeconomicobjectives.Currently, the macro-financial system of China is not very sound, and it isstill based on banks; capital market development is lagging behind, asset prices reflectthe economic information "slow";foreign exchange market has not been fully liberalized,exchange rate fluctuations still with the "color management". Obviously, the role of thecredit transfer in the process of supplying and returning money is beyond negligent.Since2008, our government authority has implemented400million RMBstimulation plans to deal with the global financial crisis, stimulating our countrydomestic consumption level and the investment scale. Specially, the large amount creditquota’s delivery is mostly obvious. After the implementation of positivemacroeconomical policy, the domestic demand expands rapidly, the entire social fixedassets investment grows fast; the price of real estate assumes the tendency ofrising……This contradicts the goal of our country macroeconomical policy. Therefore,the validity of steady monetary policy through the credit conduction receives moreattention from people.This article researches that whether the credit conduction mechanism can conductour country monetary policy to achieve the macroeconomic goal effectively. And inprofits from the domestic, foreign scholar researches and the literature, Considering themacroeconomic finance environment as well as the microeconomic banking structure,the paper has carried on the theoretical analysis in the the validity of monetary policythrough the credit conduction.Bsides,it also has unified our country economic data andthe current economic situation to analyze the empirical study of this topic.Simultaneously, this paper dissects the blocked aspect of our country monetary policyand gives the related policy suggestion and the measurement.