The Motivation and Result of China’s Monetary Policy since 2020

Abstract

As the influence of the epidemic and the international situation in 2020, the economic development in China is slowing down. However, it still has strong resilience and endogenous driving force for development. By comparing and summarizing the monetary policy of the central bank and analyzing China’s current economic situation, this paper evaluates the structure and rationality of China’s policy effect, and puts forward the optimal policy to solve the problem of China’s economic development. This study discovered that The People’s Bank of China’s monetary policy primarily employs measures like decreasing the deposit reserve ratio, increasing liquidity, and reverse repurchase operations in the open market, depending on China’s national conditions to promote the coordinated, healthy, and steady growth of China’s economy. These measures are necessary to achieve the goals of ensuring price stability, achieving full employment, promoting economic growth, and maintaining a balanced balance of payments. The research shows that policy makers should focus on cultivating and developing new quality productive forces in the money market, maintaining reasonable and abundant capital liquidity, boosting residents’ consumer confidence, solving the structural imbalance in the labor market, and strengthening macro-policy coordination. promote the development of green finance.