Ren Zeping's Interpretation Of Opportunities And Risks In The Process Of Deleveraging

Deleveraging is one of the five tasks of supply side reform. By studying the present situation of leverage in various sectors and sectors, we analyze the causes of high leverage and the measures to deal with it, and propose opportunities and risks in the process of deleveraging.

Abstract:

1) Chinese departments Leverage ratio The corporate sector is too high. By the end of 2015, government debt accounted for 56.5% of GDP, 39.9% for residential sector, 143.5% for non financial enterprises and 21% for financial sector. The overall social leverage ratio is 260.8%, and the real economy leverage ratio is 239.8%. From the international comparison, the leverage ratio of China's real economy is in the middle reaches, but the leverage ratio of non-financial enterprises is the highest among the major economies, which reflects the severity of overcapacity in China and the urgency of reform on the supply side.

2) the leverage ratio of Chinese enterprises in different sectors: traditional high, new low. According to the data of listed companies, the asset liability ratio of the financial sector (banking, non silver) and cyclical industries (construction, real estate, steel, electricity and utilities) was high at the end of the 3 quarter of 2015, while the asset liability ratio of emerging industries (pharmaceuticals, electronic components, computers, media, etc.) and consumer services (catering, tourism, agriculture, forestry, fisheries, animal husbandry, food and beverages) were relatively low.

3) High leverage Causes: 4 trillion stimulus + state-owned enterprises just to zombies. Since the 4 trillion stimulus in 08 years, the new production capacity has been short of new demand support, resulting in serious overcapacity in traditional industries. The government takes into account the steady growth and employment protection. The inefficient state-owned enterprises' implicit guarantee, administrative subsidy, policy support and so on have resulted in a large number of overcapacity enterprises, but the surplus capacity can not be cleared. The leverage ratio of state-owned enterprises has been rising continuously, a large number of funds have been precipitated in inefficient sectors, enterprises have continued to deteriorate, the economic growth rate has been declining, and the stock market has been walking for a long time. Systemic risk Increasing.

4) deleveraging measures: promoting supply side reform, combining market and administrative means to clear production capacity, improving supply and demand in traditional industries and increasing concentration, promoting product upgrading, and reducing invalid administrative subsidies to zombie enterprises with excess capacity. Reduce the social burden of deleveraging enterprises, do well job placement and bad disposal, and guard against the bottom line of systemic risk.

5) deleveraging risk management: strong reform + wide currency. In the process of liquidation and deleveraging, there may be a surge in risk premiums, a large number of bankruptcies and rising unemployment. This scenario requires the broad currency of the central bank to calm the panic. At present, the Chinese government's public policy resources are abundant. By the end of 2015, the deposit reserve ratio of large deposit financial institutions was 17.5%, foreign exchange reserves were 3 trillion and 300 billion dollars, and Financial deposits were 3 trillion and 400 billion yuan, so as to cope with an order of magnitude financial crisis, whether external shocks or implosion.

6) deleveraging opportunities: Based on the international experience of supply side reform and the trend of China's current situation, investment opportunities mainly come from emerging industries in the field of equity financing, among which the leading industries are high-end equipment manufacturing, TMT, Internet, medical and health care, new materials, leisure services and other fields. The traditional cyclical industries, which rely on debt financing, have potential investment opportunities after the improvement of production capacity, supply and demand and balance sheet improvement.