Our reporter Su Xianggao and Yang Jie
Recently, Guo Shuqing, Secretary of the Party Committee of the People’s Bank of China and Chairman of the China Banking and Insurance Regulatory Commission, said in an exclusive interview with CCTV and other media that the basic responsibility of monetary policy and financial management is to maintain the normal balance of aggregate supply and aggregate demand.
Expand effective demand and deepen supply-side reform
Guo Shuqing pointed out that for a sound monetary policy to be precise and powerful, it needs to focus on expanding effective demand and deepening supply-side reforms.
The key to rapid economic recovery and high-quality development is to convert the current total income into consumption and investment as much as possible, and financial services have great potential. First, financial policies should actively cooperate with fiscal policies and social policies, and increase the income of low- and middle-income groups and groups more affected by the epidemic through multiple channels to meet their basic living needs and increase their consumption capacity. Second, focus on meeting the needs of new citizens, develop more marketable financial products, and encourage the consumption of housing, automobiles and other bulk commodities. Third, strengthen comprehensive financial support for service consumption in key areas such as education, culture, sports, and entertainment. Fourth, continue to ensure the investment and financing of infrastructure such as energy, transportation, and water conservancy, and at the same time integrate more financial resources to support urban renewal and rural revitalization. Fifth, make innovative use of various financing tools, promote the improvement of investment and financing mechanisms in the social sector, and accelerate the improvement of shortcomings in the social sector. Sixth, focusing on emerging economies and developing countries, continue to optimize financial services for import and export trade such as settlement, financing, and insurance, and consolidate and expand new advantages in foreign trade competition.
Guo Shuqing said that in the next step, financial institutions will further establish the concept of “equal treatment” and treat enterprises of all types of ownership fairly and justly. These include enriching the financing channels of private enterprises and supporting them to obtain more financial resources through the issuance of stocks and bonds. Promote the healthy development of Internet platform enterprises. The special rectification of the financial business of 14 platform companies has been basically completed, and a few remaining problems are also being resolved promptly. In the follow-up, normalized supervision will be implemented to encourage platform companies to operate in compliance with regulations, and to show their talents in leading development, creating jobs, and international competition.
The basis for financial stability and development will not change
Talking about the current financial risk situation, Guo Shuqing said, “Currently, my country’s financial industry is operating smoothly, and the risks are generally controllable. However, due to the combined effects of historical, periodic, structural and institutional factors, financial risks are still in a period of frequent occurrence. my country has a unique Institutional advantages, long-term economic fundamentals are the most solid, and the foundation for financial stability and development will not change.”
In Guo Shuqing’s view, the focus should be on five aspects to deal with risks and challenges. One is to strive to promote the normal circulation of real estate and finance. Adhere to the positioning of “houses for living, not speculation”, adhere to the “policy according to the city”, implement the “Sixteen Financial Measures” measures, and improve the “three-tier and four-tier” regulatory system. Taking Baojia Building as the starting point and focusing on improving the balance sheet of high-quality leading real estate companies, promote the stable and healthy development of the real estate industry, and gradually promote the transition of the real estate industry to a new development model. The second is to actively and steadily promote the risk disposal of small and medium-sized financial institutions, and comprehensively adopt various methods such as online repair, merger and reorganization, and bankruptcy liquidation to effectively resolve the risks of small and medium-sized financial institutions. Steadily implement the reform and reorganization of rural banks. Strengthen the penetrating supervision of shareholders and actual controllers, and severely crack down on hollowing out financial institutions. The third is to strictly control new non-performing assets, strictly and prudently classify them, and increase disposal efforts. The fourth is to enhance the risk management capabilities of various financial institutions. Actively cooperate to resolve hidden debt risks of local governments. Bring all types of financial activities into regulation. The fifth is to resolutely break the rigid exchange, and strictly prohibit asset management products such as wealth management and trust from promising fixed returns or expected rates of return. Resolutely investigate and deal with “fake private placement” and fraudulent issuance. Strictly regulate the cross-regional deposit and loan business of local financial institutions.
“Since the end of last year, the RMB exchange rate has rebounded sharply, and foreign capital inflows have continued to grow, which fully reflects that the international financial market is firmly optimistic about my country’s economic development and is full of confidence in economic fundamentals such as prices. In the medium and long term, the RMB exchange rate will maintain two-way fluctuations, but overall It will continue to strengthen.” Guo Shuqing said.
Deepen financial system reform
Finance is the blood of the real economy. Regarding how to deepen the reform of the financial system this year and better serve the real economy, Guo Shuqing pointed out the following tasks: First, focus on building a modern central bank system, and further clarify the basic responsibilities and policy objectives of the central bank , to maintain the stability of the currency value and to promote economic growth. It is very necessary to implement the independent financial budget management system of the central bank. Continue to advance the reform of the formation mechanism of interest rates and exchange rates, with the general direction of further marketization. The second is to strengthen and improve modern financial supervision. Establish and improve the coordination mechanism for financial stability and development. Strengthen the financial stability guarantee system. Improve the “risk-based” prudential regulatory framework to achieve early identification, early warning, early discovery, and early disposal of risks. Restrain the blind expansion of financial institutions.
Guo Shuqing also said that deepening the reform of the financial system also includes reforming and improving the governance of financial institutions. Further accelerate the development of direct financing, improve the functions of the capital market, further promote the reform of the stock issuance registration system, and increase the proportion of direct financing. At the same time, it is necessary to continue to promote the transformation and development of the insurance trust industry and standardize the development of the third pillar pension insurance.
Guo Shuqing said that the pace of China’s financial opening up will not stop in the future. “In the future, my country will further simplify the procedures for foreign investors to enter the Chinese market, enrich investable industries and asset types, and continuously improve investment convenience. Steadily expand institutional opening-up and promote high-quality implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) Create a market-oriented, law-based, and international first-class business environment, and treat domestic and foreign capital equally and equally. Improve economic and financial management capabilities and risk prevention and control capabilities under open conditions, and better coordinate development and security.”
[Responsible editor: Cao Jing]