The China Banking and Insurance Regulatory Commission issued a statement: The real estate market adjustment must be smoothly transformed, and the pension savings pilot will be launched.

On March 2, at a press conference held by the State Council Information Office, Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission, introduced the relevant situation of promoting a virtuous economic and financial cycle and high-quality development. A reporter from the 21st Century Business Herald noticed that "real estate finance" and "pension finance", which are closely related to people's livelihood, became the most frequent topics at this press conference.

Guo Shuqing pointed out that the real estate bubble and financialization momentum have been fundamentally reversed, but renting is still needed, especially rental housing, and it is meaningful to provide financial services in this area. In terms of pension, in addition to the pilot expansion of exclusive commercial pension insurance and pension financial products, Guo Shuqing revealed that the pension savings pilot will be launched soon, and commercial pension business for low- and middle-income groups is also being prepared.

When answering a question from a reporter from the 21st Century Business Herald, Guo Shuqing said that the reform direction of the provincial federations is the same, which is to establish a modern financial enterprise system. The specific organizational forms may be different, but they are all the same. The most important thing is to strengthen management. Now each province has a plan, and we are guiding the improvement and modification. We should learn from the lessons of the past and strictly scrutinize shareholders. Prevent situations such as domination of one company, related transactions, misappropriation of funds, direct use of bank funds or insurance premiums for leverage, and other investments.

The momentum of real estate bubble financialization has been fundamentally reversed

The 2017 National Financial Work Conference proposed to "strengthen supervision and improve the ability to prevent and resolve financial risks." In accordance with the requirements of the meeting, substantial progress will be made in preventing and resolving major financial risks by the end of 2019, and risks in eight areas will be significantly reduced. In 2021, risks in key areas continued to be controlled, the macro leverage ratio dropped by about 8 percentage points, and asset expansion within the financial system returned to a low level, returning to single digits again.

According to Guo Shuqing, from 2017 to 2021, 25 trillion yuan of high-risk shadow banks will be dismantled in five years, and 11.5 trillion yuan has been reduced in the past two years. About 12 trillion yuan of non-performing assets were disposed of in five years, and more than 6 trillion yuan was disposed of in the past two years. A number of high-risk enterprises and illegal financial institutions were dealt with in an orderly manner. All P2P online lending institutions ceased operations, and the outstanding loan balance dropped to 490 billion yuan. In the past five years, a total of 25,000 illegal fund-raising cases have been investigated and dealt with. The resilience against external risk shocks has been further improved.

It is worth mentioning that the hidden debt situation of local governments tends to improve, and the momentum of financialization of real estate bubbles has been fundamentally reversed. Tian Guoli, chairman of China Construction Bank, said that we emphasize that the housing market must be rationally controlled and a new model must be developed. Fortunately, we have some policy and institutional advantages. But how can we use financial market-oriented means to gradually turn this advantage into an economic driving force for sustainable development? If financial products continue to be designed around this, everyone will also see a new scene, that is, many residents will gradually become accustomed to renting in the future.

Tian Guoli believes, “From a financial perspective, renting is okay, because now people don’t always think about the appreciation in value after buying a house. That era has passed. Even if the value appreciates, it is difficult to cash out. It’s all very difficult. In fact, real estate is not a particularly ideal asset purchase. As China’s market matures, the era of relying on leasing will definitely come soon.”

Guo Shuqing pointed out, “The real estate bubble has occurred since last year. , The monetization problem has undergone a fundamental reversal. The real estate market is not as active as before, but housing is still needed, especially rental housing, and decoration is still needed. It makes sense to provide financial services in this area. The current real estate price. It is a good thing for the financial industry to make some adjustments and bring about some changes in the demand side structure, but we do not want the adjustments to be too drastic and have too great an impact on the economy. We still need to make a smooth transition.”

Standardize the development of the third pillar of pension insurance

In addition to housing, pension is also one of the topics of greatest concern to the people. The insurance industry has an important function and role, which is its economic "shock absorber" and social "stabilizer" functions.

Pension insurance plays an important role in residents’ retirement. At present, my country's pension system has three pillars. The first, second and third pillars are basic pension insurance, enterprise annuity and personal pension (individual commercial pension insurance, etc.).

According to Guo Shuqing, the third pillar of pension insurance will be standardized and developed. The exclusive commercial pension insurance pilot area will be expanded to the whole country. The pilot of pension financial products will be expanded to "ten places and ten institutions". The pension savings pilot will be launched soon. Commercial pensions for low- and middle-income groups will be launched soon. Preparations for the gold business are also being stepped up.

Exclusive pension insurance pilot. In May 2021, the "Notice on Launching the Pilot Program of Exclusive Commercial Pension Insurance" issued by the China Banking and Insurance Regulatory Commission stated that starting from June 1, the pilot program of exclusive commercial pension insurance will be launched in Zhejiang Province (including Ningbo City) and Chongqing City. Data shows that as of the end of January 2022, the six insurance companies participating in the pilot have underwritten nearly 50,000 policies, with a cumulative premium of 400 million yuan, of which nearly 10,000 employees in new industries and new formats such as couriers and online ride-hailing drivers have insured people.

On February 21, the China Banking and Insurance Regulatory Commission issued the "Notice on Expanding the Pilot Scope of Exclusive Commercial Pension Insurance". Starting from March 1, 2022, the pilot area for exclusive commercial pension insurance will be expanded to nationwide. On the basis that there are 6 pilot insurance companies, pension insurance companies are allowed to participate in the pilot. In this regard, the relevant person in charge of the China Banking and Insurance Regulatory Commission said, “Expanding the scope of the pilot can expose more consumers to exclusive commercial pension insurance products with strong pension functions, further guide and cultivate the concept of pension financial consumption; it is conducive to promoting pilot insurance The company deeply explores the development experience of commercial pension insurance, promotes and standardizes the development of the third pillar pension insurance, and better meets the people’s multi-level pension security needs.”

In terms of pension financial products, since the China Banking and Insurance Regulatory Commission announced in 2021. After the "Notice on Launching the Pilot Program of Pension Financial Management Products" was released on September 10, the pilot program of pension financial management products is also gradually expanding. The scope of the pilot was expanded from the initial "four institutions in four places" to "ten institutions in ten places". The China Banking and Insurance Regulatory Commission stated that the pilot work is conducive to enriching the supply of third-pillar pension financial products, cultivating investors' concepts of "long-term investment and long-term returns, value investment to create value, and prudent investment and reasonable returns" to meet the people's diversified pension needs.

It is worth mentioning that Guo Shuqing also revealed that "the pension savings pilot is about to be launched, and the commercial pension business for low- and middle-income groups is also being prepared." This means that in the future, residents will be investing in pension financing. When planning, the options available include not only exclusive pension insurance and pension financial management, but also pension savings and commercial pensions.

Guo Shuqing said that we have spent a lot of effort on pension insurance. Compared with basic pension insurance, enterprise annuity supplementary pension insurance, and third pillar commercial pension insurance, the development of the third pillar lags behind and urgently needs to be accelerated. Since last year, we have taken some measures and are actively and steadily advancing them, but we should not be too hasty because we also need to guard against risks. Under this premise, we will gradually develop and grow in accordance with the policy of "small steps and overall gradual progress" set by the Financial Affairs Commission of the State Council.