Stability has a foundation and policy has space - a look at my country's financial situation

Xinhua News Agency, Beijing, March 26th: my country’s epidemic situation is improving and economic development is advancing in an orderly manner, which has become the cornerstone of the stable operation of the domestic financial market. However, the spread of the global epidemic and the increased turmoil in the international financial market will inevitably bring external pressure to my country's financial market. How has my country's financial market performed recently? How to support the continued smooth operation of the market? What other tools will be in the future macro policy toolbox?

Resilience is rare in adversity. There are three major supports for the sound financial operation

The heavy snow weighs the green pine, and the green pine stands tall and straight. In the face of turmoil in the international financial market, China's financial market has performed quite steadily. The RMB exchange rate is generally stable, China's stock market operates smoothly and has strong resilience, and the scale of defaults in the bond market remains at normal levels...

"my country's financial market has withstood the test and demonstrated a high degree of stability, with wide fluctuations. "Small." Chen Yulu, deputy governor of the People's Bank of China, believes that China's financial market is currently operating generally smoothly and market expectations are relatively stable.

China is already a global financial power, with the world's largest credit market and foreign exchange reserves, and the world's second largest stock market, bond market and insurance market. The stable operation of China's financial market is crucial to stabilizing confidence in the global financial market. The world has seen that China's economy and finance have demonstrated rare resilience.

Where does the "confidence" for the sound financial operation come from? This is due to the obvious results of domestic epidemic prevention and control, the long-term positive trend of China's economy, and the important progress of China's financial reform in recent years.

Currently, the spread of the local epidemic across the country, with Wuhan as the main battlefield, has been basically blocked. The epidemic situation is a very important variable affecting the financial market. The epidemic has been effectively controlled, creating a good environment for economic recovery and financial stability.

At the same time, China's economy has shown strong resilience and room for maneuver by virtue of its huge domestic market and complete production factors. The long-term positive trend has not changed.

“my country’s real economy has been improving at the margin.” Chen Yulu analyzed that judging from the dynamics of payment and settlement data and deposit and loan data since March, the real economy continues to improve.

As the resumption of work and production across the country is being actively and orderly advanced, the resumption rate of listed companies has exceeded 98%, the rate of corporate capital transactions and capital turnover has accelerated significantly, and economic activity is recovering. China's role as a "stabilizer" and "power source" for global economic growth will be further highlighted. The vast space for development of the Chinese economy will lay the foundation for the stable development of the financial market, and the attractiveness of Chinese assets will continue to rise.

It is worth noting that in recent years, with the continuous advancement of the battle to prevent and resolve major risks, financial supply-side structural reform and the opening up of the financial sector, the robustness of China's financial system has continued to improve.

Data show that the current total amount of leveraged funds in the stock market has dropped by 80% compared with the peak in 2015, and the number of listed companies with a high proportion of pledges has dropped by 1/3 compared with the peak, and bank capital is sufficient. ratio and insurance company solvency adequacy ratio reached 14.6% and 247% respectively...

In recent years, financial reform and opening up have continued to deepen and have made good "first moves" to maintain the smooth operation of the financial market.

Precise financial policies to stabilize market support entities

Monetary and financial policies are an important policy tool to respond to the impact of emergencies and restore economic growth. Since the outbreak of the epidemic, the financial sector has stepped up countercyclical adjustments to ensure reasonable and sufficient liquidity, and has given a more prominent position in supporting the recovery and development of the real economy.

After the financial market opened, the People's Bank of China carried out a total of 1.7 trillion yuan in short-term reverse repurchase operations on February 3 and 4, which played a key role in maintaining market liquidity and the smooth operation of the financial market. effect.

“The provision of liquidity beyond expectations ensures sufficient liquidity in the banking system and money market, stabilizes market sentiment in a timely manner, and ensures the smooth operation of financial markets during the special period of epidemic prevention and control.” Wen Bin, chief researcher of China Minsheng Bank He said that at the same time, he insisted on not using a flood of strong stimulus and balancing the relationship between stabilizing growth and preventing risks.

At the same time, a variety of monetary policy tools have also provided financial guarantees for epidemic prevention and control and the resumption of production. The policy direction of this war against the epidemic is very clear, which is to support the real economy.

The series of financial policies introduced for this purpose are also very targeted. The core purpose is to ensure the capital flow of enterprises and reduce the financing costs of the real economy.

——Use targeted tools to accurately support supply and production resumption. The 300 billion yuan of special re-loans established in the early stage, and the subsequent increase of 500 billion yuan of re-loan and re-discount quotas, have enabled enterprises to obtain loans with preferential interest rates of more than 330 billion yuan, helping enterprises to tide over difficulties.

——Guiding market interest rates to steadily decline. Since the outbreak of the epidemic, the open market reverse repurchase, medium-term lending facility winning bid rates, and loan market quotation rates have each dropped by 10 basis points, driving the overall market interest rate downward. The general loan interest rate in February was 5.49%, 0.61 percentage points lower than before the loan prime rate (LPR) reform.

——Indirect and direct financing work together. At present, my country's banking institutions have provided more than 1.8 trillion yuan in credit support to fight the epidemic, and have arranged for small and micro enterprises to defer the repayment of due loan principal and interest; in the first two months of this year, the total financing of stocks and bonds on the exchange market was about 1.3 trillion yuan.

The financial system is stable and the economy is stable. Dong Ximiao, chief researcher of Xinwang Bank, said that in the process of fighting the epidemic, China's economy and financial system have established a benign and effective two-way interaction. On the one hand, my country's real economy has resumed work and production in an orderly manner, providing a solid guarantee for financial stability; on the other hand, the smooth operation of the financial system has provided strong support for the real economy, and the stability of financial market expectations has also boosted investment and consumer confidence.

The policy space is large and flexible enough to be fully prepared to deal with challenges

Currently, the risk of sporadic cases and local outbreaks in my country still exists. The global epidemic has caused a serious impact on the world economy. The impact has been severe and the turmoil in the international financial market has intensified, which has brought new challenges to my country's economic and financial development. At the same time, as the country gradually returns to normal production and operation order, small, medium and micro enterprises are still facing greater pressure.

In the face of domestic and foreign challenges, we are not afraid of wind and rain, and our country’s macro policy space and tool reserves are sufficient.

In the future, my country’s macroeconomic policy tools will still be relatively abundant, with large room for operation. Experts believe that in the future, open market operations can be increased at an appropriate time, the MLF bidding interest rate can be adjusted, and the reserve requirement ratio can be reduced in an appropriate and targeted manner. Liu Guoqiang, deputy governor of the People's Bank of China, also mentioned that the benchmark deposit interest rate will be adjusted appropriately in a timely manner by comprehensively considering economic growth, price levels and other fundamentals.

Stick to the green hills and don’t let go, let the winds blow from the southeast to the northwest. In fact, in the face of the changing international market, my country still adheres to reform and makes full use of existing policy space and tools to deal with various potential risks and challenges. At the same time, it strives to strengthen international macro policy coordination.

Chen Yulu said that the financial system will follow the existing policy framework and the principles of marketization and rule of law, accurately grasp the phased changes in epidemic prevention and control and the economic situation, and adjust policies accordingly. Dynamics, rhythm and emphasis.

“With the global wave of interest rate cuts starting and inflationary pressure still persisting, China’s monetary policy direction has shown determination. It not only adheres to the basic principle of matching the growth rate of M2 and social financing scale with the growth rate of nominal interest rates. "We will also accelerate the market-oriented reform of interest rates and ensure that the direction of financial transfer to the real economy remains unchanged." Cheng Shi, chief economist of ICBC International, believes that on the one hand, this retains policy space, and on the other hand, it also avoids flooding. .

At present, my country's financial market is still facing complex and severe internal and external situations. We need to keep a clear head, strengthen monitoring of the operation of international financial markets, and make policy reserves. We must not take it lightly.

China’s economic and financial policies respond in a timely manner, with large space and sufficient flexibility. It is believed that China’s financial market will continue to operate stably in the next step, further play the role of financial services in the real economy, and make an important contribution to stabilizing confidence in the global financial market.