PBoC Changes 9 Words, What Does It Signal?

In the PBoC quarterly report there are nine new words describing monetary policy: 增强针对性和有效性, enhance the focus and effectiveness of monetary policy.

The reason for this wording, but also the central bank report "China Economic Outlook" reflected. The central bank said the price situation, price inflation has increased, the change must focus on the future. In the first quarter price increase appears certain to rise, more concerned about all aspects. From internal and external environment currently facing, the overall global economy relatively weak, rebalancing will experience a longer period, the domestic economic restructuring process has not ended, the economic recovery are not yet solid, downward pressure still exists, coupled with the recent monetary growth etc. have stabilized at a high level, pig grain ratio at historic highs, the future may have come down, if these trends can be sustained, overall beneficial prices remain basically stable.

In the last quarter monetary policy report, the central bank said, "from the price situation, price inflation low, stable, and continues to show structural features." Less representation, there is no worry of price performance.

...Politburo April 29 the meeting, the meeting stressed that "macroeconomic policy should be better targeted," which mentions the price issue, said to focus on price changes to ensure the effective supply, and actively and steadily push forward price reform. Politburo meetings concerned with the price issue are still relatively rare, many analysts have stressed this signal.

Not a shift so much as reinforcing recent statements. Price inflation and credit growth are a concern, but the economy still needs support and will for some time.

PBoC: 中国货币政策执行报告 二○一六年第一季度