How Can Finance Really Support The Development Of The Real Economy?

China has a large stock of financial assets. However, the development of internationalization and integration of financial system lags behind the reform of the whole market system in the short term.

Li Keqiang, premier of the State Council, chaired a State Council executive meeting on December 2nd to hear the next financial reform and opening related work report, and deployed to carry out pilot projects of financial reform and innovation to enhance the financial services' real economic capacity.

How to build a modern and open financial system is the key factor that determines the success of China's economic reform and development in the 13th Five-Year.

In the next five years, the international and domestic financial environment is more complicated. China is still facing the problem of low efficiency of financial asset allocation, the serious imbalance between global financial centres and global manufacturing centers in international division of labor and interest distribution.

In order to gain international status in the new round of global financial competition and the division of global value chains, we must implement prudent and orderly development strategy of gradual financial opening and financial internationalization, promote pnational mobility and market allocation of financial / capital elements, and remove institutional obstacles to financial development so as to speed up the pformation of market oriented financial.

At the same time, we should actively adjust the structure of reserve assets allocation, take the "one belt and one way" and "going out" strategy as an opportunity to build a global investment trading and payment clearing system, credit rating system and financial security guarantee system, and comprehensively enhance China's international financial right to speak.

China has a large stock of financial assets. However, the development of internationalization and integration of financial system lags behind the reform of the whole market system in the short term.

Coupled with the low quality of commercial bank assets, the loss rate of capital utilization and the high rate of bad debts, it not only led to the distortion of financial resources allocation, but also produced a large number of idle assets and precipitated assets, which are highlighted in the following three aspects:

First, the financing system based on bank credit determines the development of manufacturing and infrastructure, while the supply of high-tech industry, service industry and small and medium-sized enterprises is relatively backward.

Credit is concentrated on government projects, state-owned enterprises and large enterprises, while private enterprises and small and medium-sized enterprises lack enough credit support.

Secondly, the financial sector has an obvious "crowding out effect" on the entity sector.

Since 2011, the rising total amount of social financing, off balance sheet financing and bond financing have contrasted and deviated from the sustained downward economic growth and macroeconomic output.

However, the money released does not enter the real economy, but in the financial and virtual economy.

Third, money multiplier and output

Decline.

Since the beginning of this year, the monetary multiplier has shown a clear departure from the economic output - the money multiplier has increased, but the downward pressure on the economy is still relatively large. The main reason is that the government has been deepening the credit creation from the outside to stabilize the debt and asset prices, but the effective demand of the real economy is not enough. The recovery of the monetary multiplier is more for the buffer of debt pressure than for the real economy.

After the third Plenary Session of the 18th CPC Central Committee, the focus of deepening the reform of the financial system is to develop a financial system that supports the real economy, prevent the virtual economy from overexpanding, avoid the financial economy from the actual needs of the real economy, and achieve the goal of building the financial system from the fund-raising type to the optimal allocation of resources.

On the one hand, we should control the financial system's Pro cyclical nature and control the expansion speed of the credit through macro prudence, so as to avoid moving towards an overindebted economy.

At the same time, speed up

Comprehensive financial system reform, such as asset securitization and direct financing, dredge the circulation of social capital inside and outside the financial system.

On the other hand, we should optimize the structure of the financial system and promote the pformation of financial pformation to the pformation of the real economy.

According to the actual situation in China, we can establish small and medium-sized enterprises that are conducive to the development of small and medium-sized enterprises.

In the credit structure, asset structure, business structure, income structure and profitability structure and other aspects of small and medium-sized enterprises to better match.

During the "13th Five-Year" period, efforts should be made to build a modern financial system and improve the efficiency of financial services in the real economy.

In addition to comprehensively deepening financial reform and improving the financial system and mechanism, we should also improve the financial system of science and technology, develop green financial system, and promote inclusive financial strategy.

We should highlight financial development and actively implement the "capitalization" of scientific and technological achievements.

In order to adapt to the innovation driven development of "mass entrepreneurship and innovation", it is urgent to establish a financial system which is different from the traditional industrial economic era, and turn to a modern financial system which is more conducive to economic upgrading and industrial independent innovation.

This kind of financial system should be a strategic investment system of the state. It will provide systematic financial support for China's economic upgrading through the use of government financial investment, enterprise R & D and industrialization input, venture capital investment, bank credit investment, capital market financing and science and Technology Fund.

At the same time, the state has promoted the "two-way opening of finance" as an important strategic mission in the 13th Five-Year development period, and this is also the only way to build an open economic system and push China from a financial power to a financial power.