Economic Policy: High Leverage, High Risk And Risk Prevention.

The thirteenth meeting of the central financial and economic leading group recently stressed again that we must unswervingly push forward the structural reform of the supply side, with a focus on promoting "three to one, one reduction and one subsidy".

The industry believes that in order to prevent and control risks, it must be unswervingly leveraged, and deleveraging is a long and arduous process. It needs active, stable and classified policies.

Leverage is a tool of "small and big fight". Lending to banks and issuing bonds to the market are all leveraged, which can leverage more funds with less capital to achieve greater development.

However, everything is different, especially in the financial field.

Excessive leverage will bring high risk.

The subprime mortgage crisis and the financial crisis in the United States were triggered by the consumption of American housing and excessive leverage of financial institutions. Up to now, the global economy has not yet come out of the shadow of crisis.

"Deleveraging is a common challenge facing major economies after the international financial crisis.

After China's economic development has entered the new normal, it is also facing the challenge of turning the way and preventing risks.

Wang Jun, Vice Minister of Information Department of China International Economic Exchange Center, said.

With the decline of economic growth, especially the decline in corporate earnings and local fiscal revenue growth, debt risk is on the rise.

In the aspect of enterprises, the risk is characterized by heavy burden of interest and difficulties in operation. In terms of local governments, financing is limited in infrastructure construction and other fields, which restricts the support for development. In the banking sector, the performance of non-performing loans is rising, which has affected the stability of the financial system.

"After China's economy enters the new normal, one of the outstanding risks is the higher leverage ratio.

Deleveraging is a major task of economic work this year and even in the '13th Five-Year' period.

Former vice president and state of the Chinese Academy of Social Sciences

Li Yang, director of the development laboratory, stressed.

At present, China's debt risk is generally controllable, but the risk of higher leverage in the real economy needs to be resolved.

This is due to the fact that investment has been too dependent on investment for a long time, and that there are also factors that should be taken in response to the international financial crisis.

According to the national balance sheet research conducted by Li Yang, the leverage ratio of non-financial enterprises continued to rise from 2008 to 2014, which is at a high level and deserves vigilance.

Deleveraging relies on a series of policies and measures in various fields.

In order to create a favorable environment for deleveraging, monetary policy is stable and reasonable.

The latest data show that in April, China's broad money M2 balance grew by 12.8% over the same period last year, the growth rate dropped 0.6 percentage points from last month. At the end of 4, the balance of RMB loans increased 14.4% over the same period last year, and the growth rate dropped 0.3 percentage points.

The responsible person said that the next stage will continue to implement a sound monetary policy, maintain flexibility and moderation, do well in the total demand management suited to the structural reform of the supply side, and create an appropriate monetary and financial environment.

Deleveraging is closely related to productivity, and we need to co-ordinate our efforts.

Central University of Finance and Economics professor Guo Tianyong pointed out that the current high leverage ratio is mainly reflected in the serious excess capacity industry. Deleveraging must strictly control the access of funds to these areas, and deal with the liabilities of related enterprises.

"Enterprises are facing pressure to operate, so it is impossible for banks to be independent. It is necessary to clench their teeth with enterprises and reduce the debt ratio."

Zhang Gaowu, general manager of the financial operations department of ICBC Hebei branch, introduced that from last year to April this year, Hebei branch adjusted and converted 6 billion yuan of steel trade and coal trade loan.

At the same time, it recently helped Hebei iron and steel issue about 2000000000 yuan of short-term financing coupons to help promising enterprises to make structural adjustment.

Reducing the leverage ratio means that banks need to actively handle bad loans.

At the end of the first quarter, the balance of non-performing loans of commercial banks nationwide increased by 117 billion 700 million yuan compared with the end of last quarter.

Banks should handle cash disposal, bulk pfer, cancellation and reorganization.

For local government debt problems, debt replacement needs to be accelerated.

In April this year, the scale of loans for nationwide replacement of local financing platforms was no less than 350 billion yuan, a significant increase over the previous two months.

Local governments with short term and high interest rates are being replaced by debt with long term and low cost, which is conducive to alleviating local pressure.

While taking measures to alleviate the current pressure, we must fundamentally solve the problem that enterprises rely too much on higher cost bank loans. We must use more channels such as capital market and venture capital. To fundamentally solve the problem of local government debt building, we must vigorously develop PPP (government and social capital cooperation) mechanism.

At present, some corporate bonds in the bond market are in breach of contract. The housing prices in a small number of cities in the real estate market are rising too fast, and the cases of illegal fund-raising are frequent. These new situations and new problems are closely related to the higher leverage ratio, and the deleveraging is imperative.

"When economic development enters the new normal, it can no longer rely on leverage to stimulate the real economy. Deleveraging is a very real and urgent task."

Wang Jun bluntly said.