In 2018, China's macro leverage ratio was 1.5 percentage points lower than that of 2017. Photo: iStock

China’s current monetary policy has not been relaxed, nor is it flooding the economy with excessive credit and liquidity to spur economic growth, Economic Daily reported on Saturday, citing several economists, who endorse the policy.

In the view of Lian Ping, chief economist of Bank of Communications, the flooding style mainly refers to the situation in 2009 when broad money supply increased by 27.68% year-on-year, while new yuan loans rose by 31.74%.

Compared to that, M2 growth year-on-year in January was 8.4%, while new yuan loan grew by 13.4%, which is growing moderately and smoothly, Lian said.

The macro leverage ratio is also an important indicator. In 2018, China’s macro leverage ratio was 1.5 percentage points lower than that of 2017.

In contrast, the annual average growth of the ratio was 11.8 percentage point from 2012 to 2017. This means China has achieved macro leverage ratio reduction for the first time in 2018, said Ruan Jianhong, director of the Survey and Statistics Department of the People’s Bank of China.

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