Managing China’s Transition to the “New Normal”

Centre for Contemporary Chinese Studies, University of Melbourneumelb_logo

Managing China’s Transition to the “New Normal”: Why Monetary Easing is Needed to Avoid a Deep Slump


In this presentation, Guonan Ma takes on the heated policy debate raging since 2014 on whether monetary easing is a sign of retreat on economic reform that feeds excessive investment and slows down restructuring, and argues instead that monetary easing —a policy shift that began in late 2014, is important for short-term economic stability as well as providing a congenial context for reform to the new model of growth.

The international context of Chinese monetary easing is the post–financial crisis monetary easing (QE) by the central banks of Japan, the United States, the European Union and the United Kingdom. One consequence of the developed countries’ monetary policies was an unintended tightening of Chinese policy. Ma argues that this is a cause of Chinese growth in recent years being slower than optimal, which carries risks and increases the difficulty of reform.

Dr Guonan MA is a senior fellow at the Fung Global Institute (Hong Kong) and a non-resident scholar at Bruegel (Brussels). Prior to his retirement, he was a senior economist at the Hong Kong Office of the Bank for International Settlements (BIS) for fourteen years. Before joining the BIS in 2001, he was a chief North Asia economist for about ten years at various investment banks, including Merrill Lynch and Citigroup. Prior to his investment bank career, he was a lecturer and research fellow at the Australian National University for four years following his Ph.D. in economics at the University of Pittsburgh (1990). Dr Ma was born in China where he obtained his undergraduate degree in economics at Beijing University (1982).

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