in the present slowdown in economic growth in China

Time is ripe cut lending rates China's current macro-economic troubles faced by far exceeds that of gross domestic production (GDP) implied by this indicator: GDP grew in the first quarter of this year 8.1%, although higher than the average expected for the whole of 7.5%, however, compared with the four-quarter 8.9% growth last year, also is a significant slowdown. If more specific from the 3 more importantBank credit and standard usage, rail freight, this downward trend is even clearer. According to the April electricity consumption per cent growth rate than the fall last month of 3.3% of the whole society, industrial electricity consumption per cent growth rate than the fall last month of 2.55%. April output grew a mere 0.7%, also well below March's growth. Power consumptionSlowdown effectively show that activities in the overall economic slowdown, slower growth in industrial production and in the process end of search. In terms of railway freight transport volume, March national rail freight sent total of completed 344.21 million tons, an increase of 2% April completed national railway freight traffic volume of 329.32 million tons, an increase of 4.3%. And compared to the same period last year, the two monthsGrowth rate has dropped by almost half. Indicators are of most concern to bank credit. First 4 months of the year, in addition to March outside the credit volume grew by more than 1 trillion, marked decline of the overall credit is an indisputable fact. In particular, the April new loan only up to 680 billion yuan, significantly lower than the market average forecast of about $ 800 billion worth of value. The current weak credit growth,Subject to due loan concentrations during the response to the international financial crisis, in the mode of economic development in the process of change and adjustment of economic structure of friction outside factors such as the fall in loan demand came from sharply reduced loan demand represented by private enterprise has become the most important factor. People's Bank of China released the first quarter of 2012 national bankers survey report, one quarterA fall in loan demand index: loan aggregate demand index for the 79.6% in the first quarter, lower than the previous quarter and last year and 0.3 www.powerleveling.us/diablo-3, and manufacturing sectors fall in loan demand and more obvious. From the perspective of enterprise scale, medium business loan demand index for 72.7%, compared to the quarter fell by 0.6%; small business loan demand indexPrevious quarter flat, 81.8%. Seen from the specific structure, weak April monetary and credit data, showing the total structure of double features, the narrow money supply is poor and broad money supply growth continues to decline, Bill fast growth and short term loan growth, more than two-thirds per cent of new loans in the month, only added $ 120 billion of medium-and long-term loans of enterprises, fully demonstrates that whenWeak credit demand before. In this connection, there should be a choice of monetary policy is to cut lending rates, or expanded lending rate floating space. If the lending rate to 90 percent, according to a one-year basis would amount to around 65 basis points cut, is much larger than a 25 basis point rate cut. In fact, the real economic risk, under the background of the sharp decline in corporate earnings growth,Decline in corporate rates average earnings index representative of the entire society is natural. Loan interest rate cut will greatly reduce the interest burden of enterprises, helps to improve business conditions. According to relevant data, by the end of April, 58 trillion loan balance estimate cut 25 basis points of credit interest rate is equivalent to the whole of society to save interest on $ 150 billion, due to a greatMin loan is to flow to the enterprise, enterprise is no doubt the biggest beneficiaries. Moreover, in the present slowdown in economic growth in China, when banks are raising lending rates as a whole, commercial banks ' net interest margins continue to rise. According to statistics released by the China Banking Regulatory Commission data, first quarter of the year, commercial banks ' net interest margins continue to rise, reaching 2.8%, four-quarter compared with last year increased by 10A basis point. This indicator along with the listed Bank income reached another all-time high in the first quarter, an increase of more than 23%. From the absolute measures, 2011 has an average return on investment of funds of listed companies in China in 2007, around 11.6% per cent. Comparative domestic benchmark 1-year lending rate currently is 6.6% diablo 3 power leveling, this actually means that enterprise creditBasic was working for the Bank. At the same time must pay attention to is, accompanied by a growth in foreign exchange trend of decline, fundamental change in domestic money creation mechanism. Four quarters of last year, the Exchange had 3 consecutive months of negative growth: October, November, December, foreign exchange accounted for $ reduced $ 24.9 billion, and $ 27.9 billion, respectively, for nearly ten yearsAppeared for the first time. Latest data published recently by the Central Bank showed that April balance of Foreign Exchange accounts for more than $ 25 trillion of financial institutions, from the 60.571 billion yuan less, reversing a trend after 3 consecutive months of growth. In particular, China in April, foreign direct investment (FDI) to 8.401 billion dollars, down 0.74%, the sixth straight month of negative increasesLong. This suggests that long-term capital to start gradual withdrawal to China as the representative of the emerging markets. Foreign Exchange is a Central Bank to buy foreign assets and appropriate placement of the Yuan, as the primary measure of scale of international floating capital entry parameters, while new loans in foreign exchange and is the primary means of releasing liquidity into the banking system in China. In the past decade, from $ 1.78 trillion of foreign exchangeSite rose to $ 25.35 trillion at the end of last year. 2007-2011 in particular, increased $ 15 trillion of foreign exchange, the average annual increments of $ 3.1 trillion. Therefore, under the current conditions, and reduction in the rate of increase is to improve the monetary multiplier effect, new lending growth will certainly replace the package meeting become the dominant way of creating money. Therefore, Straighten out the internal perspective of the relationship between money creation mechanism, lower lending rates in the present more and more urgent. Over the past 6 months, the Central Bank has cut the deposit rate 3 times, banks need to hold reserves equal to 20% deposit, lending resources and capacity increased dramatically. However, a credit and sluggish in the first quarter of this year is not the main causes of supply do notEnough, that bank lending is limited, but demand for loans under the current loan interest rate fell sharply. So, cut the deposit rate alone is unable to resolve the predicament of current money creation mechanism, loan interest rates as the time is ripe for immediate adjustment of supply and demand changes.