The Central Government Resolutely Put An End To The "Bad Behavior".

Financial leverage is a top priority and needs continuous progress.

Not surprisingly, there has been a wave of financial deleveraging in recent times and at any cost.

For example, some people say: financial leverage is an unavoidable economic pain; moreover, the real economy can withstand the increase of financing costs in the process of financial deleveraging.

I really can not understand why China's economy has to suffer from "labor pains" without playing. If we link up the so-called "labor pains" again and again, is it still a "labor pains" problem? Why is the real economy always in a "bad luck" position? In the process of financial turmoil, the real economy is unlucky, so we must make the real economy "labor pains" to tackle the financial chaos. Is this still over?

Therefore, we must make it clear that we should not continue to steal from the "deleveraging" problem, ruthlessly destroy the capital market and make the real economy lose capital support.

The ultimate consequence of this is the complete collapse of China's economy.

Why do I say that someone has been cheating on the "deleveraging" issue? Because I see the fact that since the central economic work conference last year, the fortieth session of the Political Bureau of the Central Committee this year, and then to the important economic work conference and departmental documents, the central government emphasized "reducing the leverage ratio of enterprises as the top priority". Why is it now that "financial leverage is the top priority"?

In from December 14 to 16, 2016, the central economic work conference was held in Beijing. During the "three down, one down and one subsidy" work, the meeting clearly pointed out: "in terms of deleveraging, we should reduce the leverage ratio of enterprises as a top priority under the premise of controlling total leverage."

In March 6, 2017, Premier Li Keqiang put forward the government's work report: "under the premise of controlling the total leverage ratio, we should reduce the leverage ratio of enterprises as the top priority". At the same time, we should give enterprises the way of deleveraging: "promoting enterprises to revitalize stock assets, promote asset securitization, support the marketization and legalization of debt to equity swap, increase equity financing efforts, strengthen financial leverage constraints of special state owned enterprises, and gradually reduce corporate liabilities to a reasonable level".

Note that these methods clearly point to the real economy rather than financial enterprises.

In the afternoon of April 25th, the Political Bureau of the CPC Central Committee carried out the fortieth collective study on safeguarding national financial security. Xi Jinping, general secretary of the CPC Central Committee, put forward 10 problems when he presided over the study. Third of them were "taking measures to deal with the risk points, controlling the increments actively, actively disposed of the stocks, cracking down on the behavior of escaping from debts, controlling the leverage ratio, increasing the efforts to crack down on market illegal activities, and focusing on the financial market and Internet finance to carry out a comprehensive investigation and investigation."

Note that for the financial leverage, the general secretary's view is "controlling the leverage ratio", and the next fourth clearly points out: creating a good financial environment for the development of the real economy, dredging the channels for financial access to the real economy, actively regulating the development of multi-level capital markets, expanding direct financing, strengthening the guidelines for credit policies, encouraging financial institutions to increase financial support for advanced manufacturing and other fields, and promoting structural reforms on the supply side.

I think this is a requirement for the financial industry to return to the origin of the financial services entity economy, and it is also the direction that Chinese finance must seriously reflect on at the moment, and there is absolutely no "permit".

Tolerate the pains of the real economy.

From 26 to 27 April, the national economic restructuring conference was held in Beijing in 2017 to study and implement the important speech of general secretary Xi Jinping.

At the meeting, the head of the special group of the central economic system and the reform of the ecological civilization system, the director of the office of the central financial and economic leading group, and the deputy secretary and deputy director of the national development and Reform Commission, Liu He, delivered a speech at the meeting and talked about several important issues that need to be grasped in the reform. He stressed: "actively and steadily deleveraging, reduce the leverage ratio of enterprises as the top priority, promote enterprises to revitalize their stock assets, promote asset securitization, support the marketization of the rule of law, pform debt into equity, develop multi-level capital markets, strengthen the financial leverage of enterprises, especially state-owned enterprises, and gradually reduce the liabilities of enterprises to a reasonable level".

4 days ago, the central bank also said in the monetary policy implementation report: unified regulation standards, effective prevention and control of asset management products and other shadow banking risks.

Using multiple means, actively and steadily deleveraging, under the premise of controlling the total leverage ratio, we should reduce the leverage ratio of enterprises as the top priority, and support the marketization of the rule of law and debt to equity swap.

Actively regulate and develop multi-level

To promote stable and healthy development of capital market.

Do you see? Do I need to use another argument? My question is: how many people have thought about the economic logic of "central tactical deployment"? My understanding is that financial leverage is "right", but deleveraging is from the beginning of the financial sector, and it is "out of order."

We must understand that the relationship between the leveraging of the real economy and the risk of financial leverage is like "the two sides of a coin".

Now, the Chinese economy is just in the vicious circle between the two, which is the fundamental reason for the weakening of endogenous economic growth momentum in China.

How to solve the problem? We must vigorously develop the capital market, increase the stock balance of debt, and change the creditor's rights into equity. Therefore, the general secretary and the prime minister will be patiently emphasizing: "creating a good financial environment for the development of the real economy, dredging the channels for financial entry into the real economy, actively regulating the development of multi-level capital markets, and expanding direct financing.

We should encourage financial institutions to increase financial support for advanced manufacturing and other fields, and push forward structural reforms on the supply side.

Requirements: "promoting enterprises to revitalize stock assets, promote asset securitization, support the marketization and legalization of debt to equity swap, increase equity financing efforts, strengthen financial leverage constraints of special state owned enterprises, and gradually reduce corporate liabilities to a reasonable level".

What is the channel for finance to enter the real economy? Capital market exists and is unique.

But the reality is that deleveraging starts from the financial sector.

This wrong sequence will certainly lead to a sharp contraction in the capital market, and will make the financial leverage more and more high, and the real economy will become a "financial lamb".

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