PBOC Says Lower M2 Growth May Become China's New Normal

The transcript discusses China's economic situation, focusing on the 1% GDP growth and the concerns of the PBOC regarding the velocity of money. It highlights the need for economic adjustments and the role of shadow banking in China's financial structure. The discussion includes the breakdown of credit data, showing a pullback in shadow banking elements, and the measures taken by authorities to raise money market rates. The transcript also covers the impact of these financial policies on the bond and stock markets, and the potential effects on the real economy if it starts to slow down.

What is one of the key reasons the PBOC is concerned about the velocity of money?

• To increase GDP growth

• To adjust to a new normal

• To boost exports

• To decrease inflation

What is the Chinese government's stance on the shadow banking system?

• They are unaware of it

• They are ignoring it

• They are increasingly aware and vocal about curbing it

• They are encouraging it

What action has the Chinese government taken to address shadow banking?

• Lowered interest rates

• Increased government spending

• Increased money market rates

• Decreased taxes

What has been the impact of the measures to contain leverage on the financial markets?

• Boost in stock market

• Stress in bond markets and wobbles in stock markets

• No impact

• Increased stability

What is the dual approach being taken by the Chinese authorities?

• Maintaining economic growth while controlling financial risks

• Encouraging foreign investment and reducing tariffs

• Increasing exports and imports

• Boosting GDP and reducing taxes