Haiyin Wealth: Open risk reform 2017Comments on the speeches of officials from the "One Party, Three Meetings" at the Lujiazui Forum

6month20The annual Lujiazui Forum reopened in Pudong, Shanghai. Leaders of the "One Bank, Three Meetings" (People's Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission), including Governor Zhou Xiaochuan, made important speeches at the forum. Haiyin Wealth has compiled a speech that revealed a lot of information, and we will interpret it one by one for everyone:

What did the leaders talk about?
1
Key points of speech by Central Bank Governor Zhou Xiaochuan
Further opening up of the service industry, especially the financial industry, to the outside world
The experience of opening up the manufacturing industry to the outside world is worth learning from: "On the one hand, the opening up of the manufacturing industry has made China grow into a world factory. After introducing a competition mechanism, domestic enterprises have made great progress. The more fully open and fiercely competitive industries develop, the faster the manufacturing industry begins to prosper and become stronger. On the other hand, opening up has also promoted domestic policy reform. The opening up process has strongly impacted the traditional centralized planning policy system and triggered a series of major reforms in China, including price system reform, value-added tax reform, export tax refund, exchange rate marketization, and the opening of the General Agreement on Tariffs and Trade."WTONegotiations and other far-reaching reforms. Furthermore, opening up to the outside world has also promoted fair and full competition among domestic enterprises. Opening up to the outside world has promoted the opening up of domestic private capital access, followed by the introduction of the concept of national treatment. Whether for domestic or foreign investment, the admission conditions should be consistent

The service industry also needs to further open up to the outside world, especially the financial industry: "Finance is an important component of the service industry. Whether from..."WTOBoth the content of the negotiations and the classification of the service industry by the Chinese statistical system indicate that finance is an important component of the service industry. People often say that finance is the core of modern economy. The experiences of various countries (including China's own) have shown that protection can easily lead to problems such as laziness, financial soft constraints, rent-seeking, and weaken competitiveness, damaging industry development. The market and institutions are unhealthy and unstable, and a financial industry that is not open to the outside world will significantly harm the healthy development of the overall financial industry. Moreover, China's "the Belt and Road" is an open road, involving a large number of new financial cooperation, which will bring demand for further opening up, and also provide new opportunities for China's financial opening and international cooperation. "

Not condoning financial chaos such as high poles
"The global economic crisis tells everyone that in order to prevent financial crises, the first thing to do is to ensure the health of financial institutions. phenomena such as high leverage, low capital, and non-performing loans cannot be tolerated, while non openness and non competition often condone low standards."

Financial stability is a prerequisite for economic stability
"If finance is unstable, it often leads to major disturbances."

2
Key points of speech by Wang Zhaoxing, Vice Chairman of the China Banking Regulatory Commission
Financial innovation cannot be abandoned due to choking
Overall, compared to the considerable needs of healthy economic development, China's financial reform is not too happy, but relatively backward. China's financial innovation is not too much or too much, but relatively insufficient. We cannot waver or stop the necessary financial reform and innovation just because there are some financial chaos and risks.

The financial industry needs to promote globalization
The Chinese financial industry has fully and deeply integrated into the process of globalization, and the internationalization process of China's banking industry is constantly accelerating. Now, China is not only the largest capital importing country, but also one of the largest capital exporting countries.

Currently, there is not much risk in the banking industry, but strong regulation in the financial industry is a trend
The financial industry has strong pro cyclical or pro cyclical characteristics, and it is necessary to combine strong regulation, deleveraging, and risk prevention with the mythological supply and measurement structural reform. The supply and measurement structural reform continues to deepen and succeed, and the smooth completion of economic restructuring is the most favorable way to achieve healthy economic development and financial security and stability. Currently, the overall financial situation in China is safe and stable, and the liquidity and profitability of the banking industry remain relatively stable.

3
Key points of the speech by Jiang Yang, Vice Chairman of the China Securities Regulatory Commission
Firmly grasp the overall tone of seeking progress while maintaining stability
A stable capital market environment helps to serve the real economy, but currently, the foundation of stability is not solid enough. Therefore, preventing and controlling financial risks should be placed in a more important position.

Firmly promote the fundamental institutional reform of the capital market
The institutional rules of China's capital market are not yet perfect, and we need to steadily promote reform. Since last year, important measures have included simplifying administrative approvals for mergers and acquisitions, and strengthening supervision of mergers and acquisitions; Promote the layered reform of the New Third Board and support the development of small and micro enterprises; Improve refinancing policies; Standardize the new regulations for shareholders, directors, supervisors, and senior executives to reduce their holdings in listed companies.

Steadily expanding the two-way opening of the capital market
Deepen market connectivity and cross-border cooperation, enrich transaction targets, steadily promote the "Shanghai London Stock Connect", and further improve itR/QFIIThe system continuously enhances the internationalization level of China's capital market.

Adhere to comprehensive and strict supervision in accordance with the law
Guide listed companies and securitiesfuturesBusiness institutions return to their roots; Effectively strengthening the construction of market rule of law; Relying on the coordination mechanism of the "One Party, Three Meetings", we will firmly guard against the bottom line of systemic risks.

A stable capital market environment helps to serve the financing of the real economy. Currently, the resonance characteristics between domestic and international capital markets have significantly increased, increasing the instability of the internal foundation of the capital market. Strengthening the construction of basic systems and the two-way opening of the capital market have achieved adjustments in financing methods and structures, and the overseas financing methods and scale have gradually increased. Strict supervision has standardized market order, purified the market ecological environment, and is conducive to the long-term healthy and stable development of the capital market.

4
Key points of speech by Huang Hong, Vice Chairman of the China Insurance Regulatory Commission
Insurance plays a unique role in China's reform and development
The country's global strategy, steady development, and financial reform require a strong insurance industry.

Reform is a key move for insurance to develop steadily
Insurance originated from national reforms, grew from its own reforms, and future development depends on continuing to promote reforms.

Only by comprehensively deepening reforms can we achieve steady development and build a better tomorrow
Reform management mechanisms to enhance competitiveness; Reform insurance supervision to effectively prevent and control risks. Insurance allocates resources and manages risks in a market-oriented manner, improves national governance efficiency, and improves public services. The financial system has an imbalanced structure, with financial assets mostly concentrated in banks. The proportion of insurance related financial assets is too low and should be vigorously developed. Last year, there was a trade deficit in insurance services, and it is necessary to enhance product competitiveness. Commercial insurance focuses on asset liability matching, while policy based businesses should focus on balance, maintaining principal and minimizing profits.

Interpretation of speeches by regulatory leaders
From the content of the speech by the leaders of the "One Bank, Three Meetings", we believe that the future financial industry policies and regulatory guidance will continue to revolve around the following aspects:
1
Strong regulation and deleveraging in the financial industry will not shift in the short term
From the content of the conference speech, it can be seen that the general trend of further strengthening regulation and compressing market leverage in the future financial industry has not changed. Firstly, the stability of the financial industry is an important core of economic stability. As is well known, the financial sector in China has accumulated risks for a long time, with many potential risk points, and various risks are intertwined and complex. In this severe situation, strengthening financial supervision is not only necessary for maintaining the stability of the financial system and preventing systemic financial risks, but also a necessary requirement for guiding funds into the real economy, creating a good financial environment for supply side structural reform, and better serving national strategies. Only financial stability can ensure the overall stability of economic development. Secondly, strengthening financial regulation has a historical inevitability, and there will be no turning point due to phased events. It is normal for finance to have leverage, but high leverage in finance is problematic.16China's banking system created30Trillion of assets, equivalent to new additions30Trillion yuan, but only created5.5Trillions ofGDPThe excess currency mainly flowed into the real estate market, leading to a sharp rise in housing prices. It is precisely because the financial industry naturally likes to add leverage, and the deregulation in the past few years, that China's real currency has been seriously oversold, and some assets have had a serious foam. From the perspective of the long-term health of the Chinese economy, financial deleveraging is absolutely necessary.

2
The financial industry needs to be further opened up
Firstly, the opening up of the financial industry is not only open to foreign investment, but also emphasizes the equal rights of private capital in this industry. As an industry that pursues efficiency, the diversified competition pattern of the financial industry in the future will be further apparent, and the industry pattern of multi capital joint competition will be further clarified. Meanwhile, opening up to the outside world also means going global. The "the Belt and Road" has provided new opportunities for the opening up of China's financial industry. The Central Committee put forward the call to build the "the Belt and Road", and all parties actively responded to it, promoting the implementation and effectiveness of various policies. The "the Belt and Road" is an open road, involving a large number of emerging financial cooperation, which will bring demand for further opening up, and also provide new opportunities for China's financial opening and international cooperation.

3
The overall slowdown in the growth rate of the financial industry is a major trend
2017year4month18On the same day, the National Bureau of Statistics released data showing that the added value of the financial industry in the first quarter increased compared to the same period last year4.4%. This growth rate has created1999Since the beginning of the year, it has reached a new low for the same period. Market expectations due toMPAThe growth rate of added value in the financial industry will continue to slow down due to factors such as assessment constraints. This will increase the proportion of added value in the financial industryGDPThe proportion of has decreased. Against the backdrop of further intensified competition, stricter regulation, and reduced leverage in the future, the overall growth rate of the financial industry will further slow down.

4
But opportunities for the development of structural machinery still exist
From the speeches of officials from the "One Bank, Three Meetings", it can be seen that there are still structural opportunities for the future development of the financial industry. Firstly, financial institutions with an international perspective, financial innovation capabilities, non leverage as the core driving force for development, and practical services to the real economy will have room for further development. Secondly, in the distribution of the cake in the financial industry, foreign and private capital are expected to increase their share.

Source: Research Department of Haiyin Hu Guangjun and He Yuchen

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