Stock Index And RMB Exchange Rate Depreciation Expectations Alternate

On March 10th, at the second plenary session of the four session of the twelve CPPCC National Committee, Li Daokui pointed out that in recent years, China has seen a round of market fluctuation of the stock index's rapid downward and expected depreciation of the RMB exchange rate, which constitutes a direct threat to the current operation and pformation of China's economy.

In response to this situation, he put forward five proposals to crack down on insider trading and irrational behavior, establish a unified financial supervision system, and establish a larger capital market stability fund.

In my opinion, Li Daokui's views are very correct.

Whether the order and expectation are stable has a significant impact on the national economy and the people's livelihood. The argument that the impact of the sharp decline in China's stock market on the real economy can not be established.

From mid June 2015 to the end of the year, the Shanghai Composite Index fell by 31%, and the Shanghai Composite Index fell 22% from the beginning of this year to February 26th.

At the same time, many factors led to the depreciation of the RMB against the US dollar since 2015, about 6%.

When the real economy is expected to be unstable, the trend of financial market suddenly deteriorates, which is not a good thing for investors, entrepreneurs or ordinary residents.

In view of this situation, we need to work together to cope with the situation and stabilize our position.

Only by stabilizing can we further advance reform.

Unfortunately, so far, there are still some misconceptions about the stability of financial markets, including the stock market.

One of the most typical cases is to question the actions of the state to stabilize the stock market in June and July last year. Some people support the maintenance of stability on the surface, but also demand that the policy exit if the "certificate company should repay the money in time".

Such misunderstandings must be corrected.

Notice that any country maintains

Stability will not be considered only from the span of seven or eight months.

For the sake of its own economic and financial stability, the United States has implemented more than 4 years of quantitative easing policy. In recent years, it hastily raised the issue of China's stabilization fund withdrawal, either naive, or hoped for market turbulence.

In August 14, 2015, the SFC issued announcement No. 21, which clearly stated that "in the next few years, the Chinese card companies will not quit, and their functions of stabilizing the market will remain unchanged". "When the market fluctuates violently and may cause systemic risks, it will continue to play a stabilizing role in various forms".

This solemn statement has not changed, nor will it change.

Moreover, we should set up a large scale capital market stabilization fund in accordance with Li Daokui's recommendation. Once the panic in the financial market has dropped dramatically, we will be able to enter the market in a timely and decisive manner.

Since we recognize the herd effect in the stock market, we should cultivate our own "professional leader". The so-called "macro prudence" requires a high level of "sheep shepherd" reverse cycle management guidance.

These institutional factors are still lacking in China's financial market.

Therefore, it is necessary to reform and seek truth from facts and to plan for the near future and long-term goals.

Liu Shiyu, chairman of the securities and Futures Commission, said in March 5th, "I will do my best to remain loyal to the laws of People's Republic of China and protect the legitimate rights and interests of the vast majority of shareholders."

He also stressed that "strengthening supervision itself is also protecting the legitimate rights and interests of investors".

The author believes that this will lay a clear "bottom" for the next step of Securities Regulatory Reform: that is, to rule the city according to law, act according to law, and protect the legitimate rights and interests of investors in accordance with the law.

Whether or not to crack down on illegal activities, regulate

Behavior, improve the effectiveness of supervision, cultivate market players, strengthen the game mechanism of market players, or take measures to stabilize the market when necessary, are all inseparable from this clear background.

The author notes that at present, the call for reform of China's securities market is very high. The more this time, the more attention should be paid to the coordination of stability and reform.

Stock market stability is not only a prerequisite for development, but also a prerequisite for reform.

This has been repeatedly proved by experience at home and abroad.

If the stock market is stable, the stock market or even the result of economic development and reform will be destroyed in a short period of time.

With the basic stability of the financial market, reform can go faster and the effect of reform will be better.

The reform of the stock issuance registration system, which is attracting much attention, can be pushed and pushed forward, which is closely related to market stability.

Some scholars say, "the securities regulatory authorities must not use the index as a criterion for judging their work performance, because the two functions of maintaining the index and law enforcement principles are conflicting."

This is only half the case, because the developed market is not nobody's "index", where the "index" is a large investment bank.

In fact, any market needs leaders.