Guo Tianyong pointed out that there would be no directional change in monetary policy at this year's economic work conference. It would not carry out regulation and control by the way of compressing the total amount of money, but it was necessary to take measures to prevent asset bubbles. According to a report of the Ta Kung Pao cited by China News Service on November 26, ahead of the upcoming Central Economic Work Conference, the exit choice of expansionary policies has attracted attention from all sectors in view of factors such as the sharp rise in asset prices and the resurgence of inflation expectations. Scholars in financial and economic circles pointed out that there would be no directional change in monetary policy at this year's economic work conference. Regulation and control would not be carried out by the way of compressing the total amount of money; however, once asset prices rose too fast or the inflation rate was relatively high, it would mean that China needed to adjust the direction of macro-economic policies. Recently, many officials in financial and economic circles and well-known scholars have talked about monetary and credit policies in different occasions. Some analysts believed that the continued implementation of loose monetary policies might boost the formation of bubbles; if tightened too early, there would be concern over the secondary bottoming of the economy. In view of this situation, Guo Tianyong, Director of the Research Center for Banking Industry of the Central University of Finance and Economics, pointed out that if the monetary policy was tightened, it would indeed easily bring obstacles to the constantly warming real economy. Therefore, he believed that whether it was the moderately loose monetary policy or the active fiscal policy, there would be no directional change at this year's economic work conference. Recently, speculation over the future of preferential housing loan policies had been rampant, which not only let many potential home buyers rush to jump on the "last train" of preferential policies, but also made banks begin to tighten preferential policies for first home loans in disguised ways. Policies such as 20% down payment and 30% interest rate discount were difficult to find in some banks. As the year-end approached and there were less than two months before the expiration of preferential policies, with the time limit of previous preferential policies as a prelude, the exit of preferential policies naturally met market expectations; moreover, after basically completing annual credit tasks, the moderate tightening of banks in housing loan policies could not only allow them to choose quality customers and optimize relevant credit indicators in terms of financial assessment, but also enable them to take self-control measures when the real estate bubble became increasingly bloated, which was reasonable. However, the adjustment of housing market preferential policies by the government had always been based on encouraging self-residence type housing demand, cracking down on speculative behavior, and prompting housing policies to get closer to residents' self-residence demand. Therefore, as a people's livelihood policy, the "30% interest rate discount for first home loans" should not only not be stopped, but also be implemented as a long-term policy. The reason for the government to regulate the housing market itself lay in that housing prices were far beyond the actual purchasing power of ordinary people, while the establishment of preferential policies for first home loans initially aimed at realizing the goal of GDP growth of more than 8% by the end of the year. There was no doubt about achieving the goal of GDP growth of more than 8%. How to start the next year was what people were more concerned about. Whether the economic growth driven by Chinese government investment and liquidity could be sustained and whether it was real had been discussed for a year. The skeptical attitude towards economic trends and policy expectations was directly reflected in the capital market. This week, the Shanghai Composite Index hovered, showing weak fluctuations. However, a series of public monetary supply data currently available had already told the market that a recovery cycle driven by real investment was accelerating. In the "Report on the Implementation of China's Monetary Policy in the Third Quarter of 2009" published by the People's Bank of China on Tuesday, it was stated that "in the first three quarters, the growth rates of M2 and M1 accelerated quarter by quarter. The growth rate of M1 was more obvious. By the end of September, the growth rate had exceeded M2 for the first time since May 2008." By the end of October, the balance of broad money supply (M2) was RMB 5.862 trillion, increasing year-on-year by 29.42%, and the balance of narrow money supply (M1) was RMB 2.075 trillion, increasing year-on-year by 32.03%. The "reverse trumpet mouth" of the growth rates of M1 and M2 further expanded. It was expected that the pattern of M1 growth rate surpassing M2 would last for several months. Data may be boring, but the prosperous scenes hidden behind it, such as enterprises expanding procurement and adding investment, as well as the eager impulse of the capital market, were enough to make every investor daydream. This week, the "Everyday Economic News" invited several experts to analyze in detail the connection between monetary supply, the real economy, and the capital market. The market was accelerating its recovery. The "Sohu 2009 Bank Personal Financial Services Seminar" was held in Beijing. Leaders of regulatory authorities, responsible persons of bank personal finance departments, and scholars and experts jointly participated in this bank seminar. Below is the speech of Guo Tianyong, Director of the Research Center for Banking Industry of the Central University of Finance and Economics: Guo Tianyong, Director of the Research Center for Banking Industry of the Central University of Finance and Economics, said that generally speaking, compared with two years ago, bank wealth management products now were incomparable. Two years ago, problems with a wealth management product were ubiquitous. Now, problems were individual cases. Therefore, compared longitudinally, under the circumstances of sharp rises and falls, how individual investors could join the Growth Enterprise Market (GEM) was a problem. The GEM surged and plunged within a week after its listing, making some people dizzy. After ten years of hard work, many small enterprise shareholders listed on the GEM transformed overnight like a cocoon becoming a butterfly, becoming billionaires. The GEM really created a myth. For ordinary investors, would such a myth continue? Was the GEM the best choice for wealth creation? And how to invest rationally to gain greater returns? For this purpose, this issue of "China Observer" invited Guo Tianyong, professor of the Central University of Finance and Economics, Ren Quan of Huayi Brothers Company, and Cheng Wenwei of Hongyuan Securities Research Institute to discuss together how to trade the GEM. Host: Tencent netizens, hello everyone! Welcome to "China Observer". "China Observer" interprets China's hotspots. This week, we focus on a very hot topic, the GEM. First, let me introduce the guests here. This is Mr. Guo Tianyong, Director of the Research Center for Banking Industry of the Central University of Finance and Economics. Guo Tianyong: Hello, Tencent netizens! I am very glad to have the opportunity to communicate with everyone. Host: This is Ren Quan, a famous film and television star, who is also a shareholder of Huayi Brothers Company. Ren Quan: Hello everyone! I am very glad to be here today. The external pressure for RMB appreciation has always been closely related to the trade protectionism of developed countries. Under the promotion of various anti-dumping and anti-subsidy waves targeting Chinese exports, recently, the Group of Seven again called for RMB appreciation, pushing the "RMB appreciation" topic back to the center of attention, making China face a dilemma. It is well known that raising the RMB exchange rate when the foundation of China's economic growth has not yet stabilized will inevitably have adverse effects on China's exports and future economic development; however, if China does not respond to the "RMB appreciation" rhetoric, it may make Chinese export goods face an increasingly severe external environment. Therefore, on the issue of the RMB exchange rate, it cannot simply avoid passively, nor can it passively raise the RMB exchange rate and repeat Japan's "Plaza Accord" mistake, but should be practical, maintain the current exchange rate stability, improve its own economic structure while improving Sino-foreign relations, and avoid the RMB exchange rate becoming a "target of attack". There is insufficient basis for the hype of RMB appreciation. Since the currency reform in 2005, China has implemented a "managed floating exchange rate system based on market supply and demand and referencing a basket of currencies", and on November 1, there was news that CIT Group Inc., the largest commercial bank in the United States facing fiscal difficulties for a long time, might declare bankruptcy protection in New York as early as local time on November 1. Two days before that, on October 30, the Office of the Comptroller of the Currency announced that nine private banks including California National Bank failed that day and were taken over by the Federal Deposit Insurance Corporation, setting a record for the most bank failures in a single day since the outbreak of the financial crisis. Last year, after the outbreak of the financial crisis, 25 banks in the United States closed, and so far this year, 115 banks across the country have failed. Why did a new wave of bank failures occur in the United States when the economy began to improve? What impact will this wave of bank failures in the United States have on China? Regarding this, Sohu Finance exclusively interviewed Guo Tianyong, Director of the China Banking Research Center of the Central University of Finance and Economics. Problems in the real economy caused a batch of small banks to fail. Guo Tianyong pointed out that although there were signs of stabilization in the US economy and the support of the government allowed large institutions such as Goldman Sachs and Bank of America to slowly grow their businesses, this did not mean that small banks received the same treatment. At the same time, small banks were more unstable and had poorer credit ratings. Therefore, with the continuous deterioration of the house loan problem, many small banks were unable to bear the burden. Problems in the real economy would be more prominently reflected in fragile small banks, so it was not surprising that small banks failed in batches. "In fact, the central...