First of all, the excess liquidity is caused by the excessive growth of foreign exchange reserves, and the sustained growth of foreign exchange reserves is caused by the failure to adjust strategies and policies in time. Since the reform and opening up, China's economic development strategy has always focused on production and export, so the strategy and policy orientation are all formulated and implemented around this goal, such as supporting the construction of export bases, providing discount loans to export enterprises, implementing tax exemption policies and export tax rebate policies. After the implementation of the floating exchange rate system, the RMB is actually linked to the US dollar, and the appreciation of the world's major currencies is not obvious or even depreciated, which also stimulates exports. The export growth is too fast, which leads to a growing surplus, and finally makes the foreign exchange reserves pile up like a mountain, and the foreign exchange accounts for a substantial increase.
Secondly, the excess liquidity is caused by the excessive pursuit of rapid growth of industrial production by governments at all levels. Compared with production and export, China's policies to encourage consumption, especially for the poor and vulnerable groups, are far less powerful than those to encourage production and export. Under the control of the current fiscal and taxation system, in order to pursue the maximization of local interests, especially the maximization of local fiscal revenue, governments at all levels, regardless of social costs, environmental costs and the welfare costs of the next generation, have taken various means and measures to open various industrial parks and projects and vigorously produce various industrial products. However, in the mass production of industrial products, due to the lack of consumption incentives, the consumption growth of urban and rural residents can not keep up with the growth rate of industrial products supply, resulting in a large surplus of domestic industrial products. In this context, there is only "forced export", which further aggravates the growth of exports and the increase of trade surplus.
Thirdly, excess liquidity is caused by unreasonable income distribution policies and ineffective policies to stimulate consumption. In the case of imbalance between domestic demand and external demand, the state has repeatedly raised the salaries of government agencies and institutions, tried its best to increase farmers' income, expanded the coverage of minimum living security for low-income people, and raised the level of security. However, because China's social security system is not perfect, there is too little protection for low-income people, and China's income is excessively concentrated in high-income people, the faster the income growth, the faster the savings growth is than the consumption growth. The policy aimed to stimulate consumption by adjusting wages, but eventually led to a substantial increase in savings. For example, in 2000, the total retail sales of consumer goods in China increased by 345.78 billion yuan over the previous year, while the RMB deposits in that year increased by 654.38+050.255 billion yuan over the previous year, of which the savings deposits of urban and rural residents increased by 476.543+006 billion yuan. In 2006, the total retail sales of social consumer goods in China increased by 923.34 billion yuan over the previous year, and the RMB deposits in that year increased by 4,8271.1billion yuan over the previous year, of which the savings deposits of urban and rural residents increased by 2,053.63 billion yuan.