At the critical moment, the the State Council Finance Committee made a move.
On March 16th, the State Council Financial Stability and Development Committee held a special meeting to study the current economic situation and capital market issues. As soon as the news came out, the screen was quickly swiped, and market confidence was boosted.
In the afternoon to evening, financial management departments such as China People’s Bank, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, and Foreign Exchange Bureau voiced their opinions one after another, saying that they would resolutely implement the spirit of this special meeting and stabilize market expectations. The Ministry of Finance also made a public statement on the real estate tax.
Screenshot of Chinese government network
It must be said that it is rare for high-level meetings to face market concerns like this, and it is rare for relevant departments to make such intensive statements. A series of policy actions to stabilize market expectations have been introduced one after another.
— — China Clearing announced on the 17th that it will reduce the minimum settlement reserve for stock business from 18% to 16% from April 2022, and reduce some registration and settlement fees.
— — The Shanghai and Shenzhen Stock Exchanges and the North Stock Exchange have also indicated that they will reduce the related expenses of listed companies in 2022 … …
With the recovery of market confidence, people are more concerned about what kind of "combination boxing" the follow-up policy of stabilizing expectations will play. Then, let’s take a look at the important information that has come to us in the past two days and see what policies are worth looking forward to.
(1)
"Monetary policy should take the initiative to respond, and new loans should maintain moderate growth."
China People’s Bank Building. Xinhua News Agency reporter Ding Hongfa photo
At present, both the domestic economy with increasing downward pressure and the increasingly complex international environment have put forward higher requirements for monetary policy.
The special meeting of the Finance Committee put forward the following requirements: "Monetary policy should take the initiative to respond, and new loans should maintain moderate growth."
The central bank said that it strongly supports small and medium-sized enterprises, firmly supports the development of the real economy, and keeps the economy running in a reasonable range. China Banking and Insurance Regulatory Commission said that to meet the reasonable financing needs of market participants and increase financing supply … … Promote the increase, expansion and price reduction of financing for small and medium-sized enterprises.
The recent rise in global commodity prices has increased the pressure of imported inflation, the pace of tightening monetary policy in major developed economies has accelerated, geopolitical risks have warmed up, and the uncertainty of the external environment has increased.
In the face of the pressure and challenges of economic development, monetary policy needs to be more forward-looking and precise.
At the beginning of this year, the central bank once proposed to open the monetary policy toolbox bigger, keep the total amount stable and avoid the "credit collapse". In this context, in the first two months of this year, China’s new loans exceeded 5.2 trillion yuan, an increase of about 270 billion yuan over the same period last year.
Despite this, the current problems such as insufficient effective demand and rising costs still have a certain impact on small and medium-sized enterprises. The recovery foundation of these market players is not solid enough. The pressure to achieve the annual economic growth target is not small, and the internal and external risk challenges have increased significantly. Monetary policy needs to be more flexible and accurate, and "actively respond".
The Federal Reserve announced a rate hike on the 16th, raising the target range of the federal funds interest rate by 25 basis points to between 0.25% and 0.5%.Facing the recent complicated external environment, the market pays special attention to every move of the Bank of China.
At this time, China’s monetary policy should not only adhere to the principle of "focusing on me", but also "focusing on the front".Take the initiative, do things quickly, look ahead, walk in front of the market curve, and guide expectations.
(2)
"Timely study and propose a powerful and effective response plan to prevent and resolve risks"
One is building a property. Xinhua News Agency reporter Zhang Nanshe
The risk problem of real estate enterprises is an important aspect of recent market concerns.
In view of the real estate sector, the Finance Committee meeting made it clear that it is necessary to study and put forward a powerful and effective risk prevention and resolution response plan in a timely manner, and put forward supporting measures for the transformation to a new development model.
The People’s Bank of China said that it should persist in striving for stability and prevent and resolve risks in the real estate market. China Banking and Insurance Regulatory Commission said, actively promote the transformation of the development mode of the real estate industry, encourage institutions to carry out M&A loans steadily and orderly, and focus on supporting high-quality housing enterprises to merge and acquire high-quality projects of difficult housing enterprises, so as to promote the virtuous circle and healthy development of the real estate industry. The relevant person in charge of the Ministry of Finance said that considering all aspects, there is no condition to expand the pilot city of real estate tax reform this year.
Last year, affected by multiple factors, some real estate enterprises encountered difficulties in sales repayment and financing, and industry risks were constantly emerging. The real estate industry has a large scale, long chain and wide coverage, which has an important systematic impact on economic and financial stability and risk prevention. This kind of worry is reflected in the market.
From all indications, the policy context of the real estate market is very clear:
We should not only adhere to the position that houses are used for living, not for speculation, but also maintain the continuity and stability of regulatory policies, and pay attention to avoiding too intense adjustment and preventing the risk of disposal risks. To this end,It is necessary to take effective measures to prevent and resolve risks and promote a virtuous circle and healthy development of the industry.
Break and stand. On the one hand, it is necessary to prevent and resolve risks, on the other hand, it is necessary to actively introduce supporting policies to promote the transformation of the real estate industry to a new development model. Previously, China Banking and Insurance Regulatory Commission and the Ministry of Housing and Urban-Rural Development issued documents to further strengthen financial support for the construction and operation of affordable rental housing. After the deployment of the Finance Committee meeting, more policies are worth looking forward to.
(3)
"China government continues to support all kinds of enterprises to go public overseas"
Recently, due to the influence of various international and domestic factors, the stocks listed in the United States have continued to fall, and pessimism has even been transmitted to the Hong Kong market and the A-share market.Some market participants are worried about Sino-US cooperation in auditing and supervision and the prospect of overseas listing of China enterprises.
This meeting of the Finance Committee clearly showed our attitude: "The China Municipal Government continues to support all kinds of enterprises to list overseas."
The CSRC said that it will continue to strengthen communication with the US regulatory agencies and strive to reach an agreement on Sino-US audit supervision cooperation as soon as possible. We will promptly promote the implementation of new regulations on the supervision of overseas listing of enterprises, support all kinds of qualified enterprises to list overseas, and keep the overseas listing channels open.
At the same time,China has been unswervingly promoting the two-way opening-up of the financial sector, and even when globalization is going against the current trend, this determination and impetus have not changed at all.
Judging from these positive signals, the mainstream between Chinese and American securities regulatory authorities is to promote equal consultation, and cooperation is the way to solve the problem. The Sino-US cooperation and consultation on audit supervision has made positive progress, which is in line with the expectations of global investors. An early agreement is expected to alleviate the concerns about the delisting of China Stock Exchange.
After the implementation of the new regulations on the supervision of overseas listing of enterprises, the internal and external supervision coordination around overseas listing will be further optimized, and the "red light" and "green light" of overseas listing activities of enterprises will be more clear. I believe that the implementation of the new regulations will not only support the financing development of various qualified enterprises, but also provide more investment opportunities for global investors.
(4)
Platform economic governance "red light and green light should be set well"
2018 Cyber Security Expo site. Xinhua News Agency reporter Jiang Hongjing photo
The standardized governance of the platform economy since last year has caused some people to misunderstand and interpret some normative measures as "suppression".
This meeting revealed many new trends worthy of attention: "Steadily promote and complete the rectification work of large platform companies as soon as possible"; It is the first time that "red light and green light should be set well" … … The implication of these expressions is:The supervision of platform enterprises is not only standardized and not developed, but developed in standardization, and standardization is for better development.
The meeting emphasized that through standardized, transparent and predictable supervision, the rectification work of large platform companies should be steadily promoted and completed as soon as possible.
In April last year, the financial management department jointly interviewed some online platform enterprises engaged in financial business, and put forward the requirements for self-inspection and rectification.
It is believed that after a period of supervision and inspection, the rectification work has achieved phased results, and the regulatory authorities have a more comprehensive and in-depth grasp of the risk base of platform enterprises, and the rectification direction is clearer and the regulatory measures are more accurate.The supervision system of platform economy, which pays equal attention to standardization and development, will be gradually improved to promote the long-term healthy development of platform economy.
The governance of platform economy involves enterprises, industries, society, finance and other aspects, and needs the cooperation of multiple regulatory departments. Forming a virtuous circle of platform economy development is inseparable from the joint efforts of relevant departments. From a global perspective, this is a challenging subject. It is believed that with the deepening of regulatory practice,Our supervision of the platform economy will be more mature and perfect.
(5)
"Regulators in the Mainland and Hong Kong should strengthen communication and cooperation"
In the current round of stock market decline, the Hong Kong market has suffered a lot.
On the issue of financial stability in Hong Kong, the meeting proposed that the regulatory agencies in the Mainland and Hong Kong should strengthen communication and cooperation.
In recent years, the interconnection and integration of capital markets in Hong Kong and the Mainland have been deepening, and the stable operation of finance in the two places is more closely related. Further strengthening the communication and cooperation between the regulatory agencies of the Mainland and Hong Kong will play a very important role in promoting the healthy development of the capital markets of the two places and maintaining the status of international finance centre.
The CSRC said that it will further promote high-level opening up, strengthen pragmatic cooperation between the mainland and Hong Kong capital markets, and jointly safeguard the healthy and stable development of the Hong Kong market.
In fact, in recent years, many new economic enterprises have chosen to go public in Hong Kong, and the products of Shanghai-Shenzhen-Hong Kong Stock Connect, Bond Connect and ETF have been running smoothly, and the mutually beneficial cooperation between the two markets has been expanding and deepening. Under the new situation, it is worth looking forward to how the mainland market and Hong Kong market can further complement each other and carry out in-depth and all-round cooperation.
(6)
"Maintain the stability and consistency of policy expectations"
The expectation is stable and the market is stable. Market turmoil often comes from uncertainty.
For the policies that may have a significant impact on the economic and financial fields in the future, this special meeting of the Finance Committee gave a very clear direction, and even the wording was harsh.
"Actively introduce policies that are beneficial to the market and prudently introduce contractive policies", "Respond to hot issues of market concern in time", "Strengthen coordination and communication, and hold accountability when necessary" … …
This is actually a further deepening of the spirit of the Central Economic Work Conference held in December last year. Economic and social development is an interrelated and complex system. We should prevent the emergence of fallacy of composition, do not divide the troops and guard the pass into taking care of ourselves and not being as good as the rest, and avoid the negative effects caused by the superposition of local reasonable policies.
At present, the task of economic development is heavy and the challenges are severe and complicated, which is a "required question" for all localities and departments. This puts higher demands on the systematicness and coordination of policies.In the future, the formulation and implementation of policies should still adhere to systematic concepts and practical standards, follow economic laws, and test the success or failure of policies with practical results.
The capital market is a concentrated reflection of all kinds of information and confidence of all parties.The meeting put forward that "all policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations", which is a concentrated expression of stabilizing market expectations and confidence.
(7)
"Welcome long-term institutional investors to increase their shareholding ratio"
Image source: Xinhua News Agency
"Welcome long-term institutional investors to increase their shareholding ratio." This sentence about "real money and silver" is also a very interesting expression in the meeting of the Finance Committee.
Bank insurance institutions are an important source of long-term funds. China Banking and Insurance Regulatory Commission said that it is necessary to give full play to the advantages of long-term investment of insurance funds and guide insurance institutions to allocate more funds to equity assets. Support insurance companies to increase capital market investment, especially the stock investment of high-quality listed companies, through various channels such as direct investment, entrusted investment and Public Offering of Fund.
The CSRC said,It will improve the institutional mechanism conducive to long-term institutional investors’ participation in the capital market., increase the cultivation of Public Offering of Fund and other institutional investors, and encourage long-term investment and value investment.
In the future, with the maturity of China’s capital market, the proportion of long-term institutional investors allocating equity assets is expected to continue to rise. With the continuous establishment and improvement of the third pillar of pension, pension-related financial products will continue to emerge, injecting more long-term funds into the capital market.
To sum up a word, face up to market concerns, send a clear signal, manage expectations well, and introduce pragmatic measures to boost market confidence.(Reporter Liu Hui, Li Yanxia, Wu Yu)
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