The Focus Of Supply Side Structural Reform Must Be Placed In The Right Position.

Over the past few years, the central government has repeatedly stressed the need to speed up the "supply side structural reform". How can the supply side structural reform effectively promote "deleveraging"? I believe that in view of the non-financial sector's "high debt, high leverage and low efficiency" status quo, this reform includes improving the efficiency of capital utilization, reducing resource mismatch, stimulating production efficiency, and macro Prudential Management of stabilizing risks through the adjustment of supply side policies.

According to the data released by the International Finance Association, the world

It has reached an extreme level. From some indicators, it is far beyond the level of the financial bubble before Lehman Brothers' bankruptcy. Next, we should reduce the debt risk of the non-financial sector.

First of all, we need to adjust the balance sheet of enterprises and establish a supplementary mechanism for capital replenishment.

Ways to replenish the capital of enterprises, so that enterprises can return to a healthy level of asset liability ratio.

A significant performance slowdown in China's total factor productivity comes from the formation of internal capital changes, especially the decline in capital utilization and capital allocation efficiency.

Using investment output elasticity to measure investment efficiency (the commonly used incremental capital output rate ICOR of investment efficiency) indicates that the capital stock needed to increase the total output of the unit, that is, the total value of ICOR= fixed capital formation /GDP value added, the higher the value is, the lower the output efficiency of investment. The result shows that the average incremental capital output rate of China in 1996~2012 is about 3.9, which is obviously higher than that of the developed countries in similar growth stages.

Unit investment has brought about a decline in unit GDP, and a significant slowdown in capital turnover has increased the demand for financing, but the ability to create cash flow has declined significantly. This will inevitably bring about a decline in investment efficiency and a decline in the solvency of the entity sector.

Because of the existence of "soft budget constraint", it also leads to excessive financial resources and continues to mismatch the large state-owned industries with excess capacity. Because the relationship between state enterprises and the government is always unable to clear up, even after the implementation of self financing, it can enjoy the invisible guarantee of the government, which greatly increases the asset liability ratio of these enterprises.

It is especially important to note that since the financial crisis, the pformation of the new economy and the old economic sectors has not entered a benign track.

The debt burden of the old sector is significantly higher than the overall level and the new sector.

The study of the Natixi Bank of France divides the debt of Chinese enterprises into new departments and old departments, including new sectors, including aviation, and the old ones include chemical industry.

How to effectively reduce leverage and debt ratio in the process of structural reform and dynamic pformation must re-examine the path choice of "deleveraging".

With the aging of China's population and the increase of production costs, the growth of total factor productivity will tend to slow down. The end of the era of unlimited supply of labor and the continuous high investment for many years have made the per capita capital have reached a higher level, and the marginal return on investment is inevitable.

Demand continues to weaken.

Especially from the perspective of debt burden, debt interest rates may be in an upward path.

In addition, debt risk is linked to international risk through currency and exchange rate channels, and the spillover effect of the US dollar is one of the important variables.

According to IMF statistics, after the financial crisis in 2008, the scale of overseas issuance of non-financial enterprises in emerging markets surged sharply.

According to the international financial association, in 2014~2018, all emerging countries will need to exhibit a debt of $1 trillion and 680 billion, of which about 30% are in dollar terms.

If the US dollar enters the appreciation channel, the cost of bond renewal in emerging economies will increase significantly, and the risk of debt will rise.

Therefore, to effectively reduce financing costs, debt costs, strengthen debt risk monitoring, and global macroeconomic policy coordination are the top priority of macroeconomic risk management.

On the other hand, it is necessary to strengthen the macro institutional supply in the process of "deleveraging". In particular, we must focus on vigorously improving the efficiency of China's capital formation, further deepen the reform of the investment system, implement negative list system for enterprises (which areas can not be entered), implement the positive list system for the government (which areas can enter), and effectively ensure market access and stimulate market potential through the negative list system.

In addition, we should promptly revise the guidance catalogue for industrial restructuring and update the restricted new and elimination projects.

We should curb local governments' competitive investments, stimulate the vitality of private capital markets, reduce inefficient investment in public sectors, and further improve the capital formation and resource allocation efficiency of the whole society.