During the meeting, Guan Qingyou, President and Chief Economist of the Institute of Financial Research, was a guest on the "Phoenix Family Lounge" column, and conducted in-depth discussions on the problems that China's capital market is currently facing and the medium and long-term ideas for solving them, the Indian capital market, Argentina's economic problems, China's exports, consumption, investment trends and other topics.
Guan Qingyou pointed out that the current capital market has a monopoly of one share, inflated pricing, market long and short imbalance, inverted valuation of the primary and secondary markets, and other problems.
Guan Qingyou believes that the capital market will go through a process of de-capacity. According to Guan Qingyou's observation, some projects are now overly involuted and overly competitive in the primary market, and the secondary market is facing the process of killing valuation, which will inevitably lead to valuation inversion. "In recent years, whether it is VC and PE in the primary market, or these public and private placements in the secondary market, to use an analogy, the production capacity is too fast, and there is a bit of overcapacity. ”
Guan Qingyou suggested that we should admit that we are such a market with the best as the main body, and in terms of trading mechanism and supervision, we should start from the dimension of protecting the interests of investors.
He analyzed the reasons for the prosperity of India's capital market, and pointed out that the protection of investors and the delisting system of India's capital market are worthy of our reference, "India's trading mechanism, ** is T+0, institutions are T+3, we are now T+1, the question of T+0 has been inconclusive, it is easy to be long, it is difficult to be short, which is definitely unfair." ”
He believes that the problem facing the capital market now is not a single transaction system or a certain case, but a systemic problem. To solve the problem of defending 3,000 points, we need to start with a deep system and concept. He said, "I believe that the newly established ** Financial Working Committee can coordinate the forces of all parties, build consensus, and launch systematic reforms around the reform of China's capital market."
Talking about Argentina's latest economic measures, Guan Qingyou believes that Argentina is now like a person desperate and has to make extreme choices, "In the past 100 years, Argentina has not only experienced this stage of being a developed country, but also experienced the military period, high welfare, nationalization, driving out foreign investment, import substitution, national self-reliance and self-reliance, and also experienced what democratization, high welfare, high inflation, and high debt. They are actually a bit like a person who is desperate now, and has to make an extreme choice, because many paths have been tried in the past 100 years, but they can't work. According to his observations, it is not so easy for Argentina to want to cancel the central bank or dollarize.
When it comes to consumption, Guan Qingyou believes that the demand side should be supplemented, that is, cash subsidies should be given to consumers, but he also mentioned that it needs to be targeted at different groups, and he suggested that cash subsidies should be considered for low- and middle-income groups, vulnerable groups, especially students who have graduated since the epidemic and are now in college, secondary and tertiary institutions.
He also suggested that grain purchases should be increased, and farmers should be fed back to stimulate domestic demand. "Farmers have made contributions for so many years, and they should have a stronger sense of gain. ”
The following is a summary of the interview:
Phoenix Finance "Phoenix Family Meeting Room": We discussed the issue of defending 3000 points again at today's meeting, I remember you seem to have mentioned it before, we should discuss this issue at a deeper level, such as system, concept, positioning, do you think the current situation, do we have an option to solve the problem relatively quickly?
Guan Qingyou: I think it's actually a faster option, but in fact, it is still to deal with violations of laws and regulations seriously in accordance with laws and regulations.
This is the fundamental system for maintaining the normal functioning of the market, and it is crucial. In any market, if there are always people who come out of thousands of dollars and are not punished, or many people use cheating as a means of making profits, then there must be a problem with the environment of this market, and it is unfair for bad money to drive out good money in the long run.
In fact, these problems have existed in the past, and now everyone has formed a consensus that it is very important to strictly punish the law and follow the law and regulations. Because the problem we are facing now is not a single transaction system or a case problem, but a systemic problem. It's actually quite difficult for regulators to include the CSRC, because it's not just about the CSRC. Therefore, the newly established ** Financial Working Committee, I personally have great expectations, in the major financial field around the reform of China's capital market, I think it can coordinate the forces of all parties, build consensus, and launch systematic reforms.
Phoenix Net Finance "Phoenix Family Lounge": What do you think about the inversion of the valuation of the primary and secondary markets?
Guan Qingyou: There are specific reasons for the formation of valuation inversion, which is related to the general background of global liquidity from quantitative easing, to interest rate hikes to control inflation, from financial bubbles and empty to strengthening supervision.
In the past, the process of fundraising, investment, management and withdrawal in the primary market took a long time, and the main channel for exit was the secondary market, and everyone hoped to have a good valuation in the secondary market, so that you could exit smoothly. It turned out to be this chain, so now we see that some projects in the primary market are overly involuted and overly competitive, and the valuation has been speculated very high, and the secondary market is now facing new challenges, facing the process of valuation downward movement or killing valuation, which will inevitably produce this kind of inversion.
As far as we are concerned, in recent years, whether it is VC and PE in the primary market, or these public and private placements in the secondary market, to use an analogy, the production capacity is too fast, there is a bit of overcapacity, and the market has to go through a process of de-capacity.
Phoenix Finance "Phoenix Family Lounge": You mentioned this problem to Dean Liu Jipeng today, first of all, I want to ask, why do you think this will be a big problem?Because from the perspective of efficiency, from the perspective of the enterprise, the shareholding is relatively concentrated, will it also be a thing that can improve the efficiency of the company?Why might it be a problem for **?
Guan Qingyou: First of all, let's talk along this question, if one share is dominant, it will easily lead to the control of major shareholders. In the current market environment, when he thinks that the stock price is higher than the company's value, he will have the impulse to cash out.
But why do people think they can cash out and take advantage?It's because everyone thinks that I can sell my own ** at a relatively high **, and my ** is not worth so much money, but I can sell it at a relatively high **, then there is a problem. The cash-out of major shareholders still needs to be more clear and standardized.
Under normal conditions, a market should be balanced between long and short. Everyone has a market test on the performance of this company, so you have no problem selling **, that is, the stock price of this company is not so high that you want to sell the entire company. Isn't that how many of us are now?That is to say, it is related to the dominance of one share, inflated pricing, imbalance between long and short in the market, and speculation.
This problem has a historical evolution, we are actually in a process of interweaving new and old problems, you can't put aside the historical discussion of the problem, today are in accordance with the so-called equity dispersion of this kind of requirements, you can only divide the old and the new, the old batch has been like this, the new batch you can put forward requirements, of course, whether it is 30% or 25% or 35%, this is also **.
Phoenix Finance "Phoenix Family Meeting Room": You mentioned the adjustment of the IPO queue before, is it a thing that can be put on the agenda as soon as possible?
Guan Qingyou: I'm afraid this is also more difficult. In fact, the rules of the exchange are very clear now, then you will find that there are many companies that can meet this rule, and all over the country are helping these companiesOn the other hand, a large number of individual investors, some of whom are professional, are very clear, and some are indeed non-professional, in fact, various factors have contributed to such a result.
So why do I say it, we still have to admit that we are such a market with the best as the main body, whether it is the trading mechanism or the supervision, it is still necessary to design from the dimension of protecting the interests of investors. For example, with the same trading mechanism, we are all T+1 now, is this fair?It's certainly not fair.
Phoenix Finance "Phoenix Family Lounge": You also talked about today that India's capital market is actually a good reference for us, you mentioned that India's capital market transaction mechanism, ** is T+0, and then the institution is T+3, do you think there are other inspirations for us in addition to this?
Guan Qingyou: There are multiple factors in India's development, on the one hand, the economic prosperity and everyone's optimism about its future, on the other hand, its currency issuance and the entire liquidity environment in recent years are indeed relatively loose overall.
What India can learn from is its protection of the interests of ordinary investors, as well as its delisting system.
Our delisting system actually has practical difficulties, for example, listed companies, for the local ** is particularly important, people finally a company is listed, after the end of the delisting, you let people delist, investors do not agree, then how can this be delisted?Therefore, I think it is really necessary to sort out many of our systems and mechanisms, and under the background of the new era, in the context of building a financial power, I think it is indeed necessary to carry out a systematic combing and reform.
For example, if you look at the trading mechanism, you look at the T+1 matter, which has been discussed for so many years, but there has been no result. Of course, we have also engaged in T+0, but that was when we had just started the exchange, so everyone debated this matter itself, and I think these things can be discussed in the whole market, whether it is institutions, regulators, or investors, in fact, there must be different interests or opinions expressed, so this self-organization among investors, I personally think it is also very important.
Of course, many people say that if there is a big bull market, after it goes up, these problems may not be a problem. But in fact, this is not the case, we have experienced 6124 points, we have experienced more than 5100 points in 2015, we have experienced, but these problems are still not solved.
Phoenix Network Finance "Phoenix Family Meeting Room": Why did our policy easing this time not be transmitted to the capital market?
Guan Qingyou: Because the easing of the policy may not necessarily be transmitted to the capital market, because liquidity is only one of the levels, which also involves the behavior of institutions, the trading mechanism, and everyone's confidence.
Phoenix Finance "Phoenix Family Lounge": After Argentina's new ** took office, it began to take a series of radical economic measures, such as shock**, cutting ** departments, etc., do you think Argentina has taken this series of economic measures, will it help it solve the debt crisis or the like, or may it bring more risks to it?
Guan Qingyou: I don't know, I really don't know, because I don't have such an in-depth study of Argentina, but in the past 100 years, Argentina has experienced not only the stage of being a developed country, but also the military period, high welfare, nationalization, driving out foreign investment, import substitution, national self-reliance and self-reliance, and what democratization has also been experienced, including the stage of high welfare, high inflation, and high debt. What are they actually a bit like now?It's like a person who is cornered, so he has to make an extreme choice, because he has tried many paths in the past 100 years, but it doesn't work.
Phoenix Finance "Phoenix Family Lounge": Can it be understood that as Coase said, because an organization has a cost, and the current organizational cost of Argentina, it has no way to bear it?
Guan Qingyou: In the words of the Chinese, the so-called poor think about change, or people forced into the corner, maybe the original traditional practices are not enough to solve the problem, then let's try a strong medicine, isn't that what it means?
Of course, in the end, we have to observe, but in the end, Argentina is not so easy to dollarize, and it is not so easy to cancel ** banks. Dollarization, first of all, you have to change your local currency to dollars now, where does your money come from with such high inflation and such high foreign debt?It turns out that some countries in Latin America have also implemented the currency board system, which is a bit linked to our Hong Kong exchange rate system, pegged to the US dollar, which may be more reliable, that is, dollarization, which is applicable to relatively small economies, and you have the conditions to do it.
Editor's note: Hong Kong introduced the Linked Exchange Rate System in 1983. From 17 October 1983, note-issuing banks exchanged $1 for $78 Hong Kong dollars for the exchange rate, pay US dollars to foreign exchange** in advance, in exchange for the equivalent Hong Kong dollar "certificate of indebtedness", and then issue additional Hong Kong dollar notes. At the same time**, it also promised that after the Hong Kong dollar notes were repatriated from circulation, the note-issuing banks could also use the exchange rate to redeem the US dollar. After the implementation of the Linked Exchange Rate System, maintaining a stable exchange rate has become the sole objective of Hong Kong's monetary policy. Since its inception, the LERS has been operating well for many years, which has enabled Hong Kong to avoid the Asian currency depreciation crisis. ）
Phoenix Finance "Phoenix Family Meeting Room": Can you talk about the changes that may occur in 2023 and 2024 from the three perspectives of the troika, that is, export, consumption and investment?
Looking at it now, exports to Europe, the United States and Japan are actually still declining, but the trend is relatively weak. Exports to ASEAN, Russia, and Africa are relatively strong, especially the best relationship with ASEAN, which should be said to have formed a support for the decline in exports. This is the situation of exports, exports, which is difficult to predict now because there are so many factors.
In fact, there are two major characteristics of exports, one is that the export represented by automobiles has sprung up, which is of course a good thing, and it is also our confidence. On the other hand, we have also seen that a large number of industrial transfers and the overseas expansion of Chinese enterprises have actually caused a kind of problemThe erosion of the inclusiveness of our economic growth is also a new feature, which means that it is a challenge. Of course, you can also say that this is a stage that we must go through in the process of industrial upgrading and transformation.
Phoenix Finance "Phoenix Family Meeting Room": Yes, you also mentioned this problem, because industrial transfer will definitely lead to the elimination of certain people, or certain industries, so what should they do?
Guan Qingyou: Yes, the problem is, you seem to be able to say this as a scholar, but you also don't have back pain when you stand and talk, why?What about so many people who have been dumped by the industry?Individually, I can say that I have strengthened my Xi, worked hard to improve my skills, and got an MBA, but is it easy?It's not easy, most people can't do it.
So in fact, at this time, I think social and public policies should play a greater role. For example, new training, and encourage more third-party organizations or companies to enter the field. At the same time, we are in many areas, and I still feel that we still have a lot of room to deregulate, and what does deregulation mean?Employment opportunities mean the vitality of micro subjects.
In fact, at present, it is more difficult for you to stimulate the economy through investment and exports, and consumption is a more realistic choice. But I also agree with a lot of scholars that you can't just talk about stimulating consumption, because consumption is mainly related to income and income expectations, and you have to increase people's income in a practical way. I think there should be a form of cash subsidy, which is direct discovery money.
Phoenix Net Finance "Phoenix Family Meeting Room": Send money to the people?
Guan Qingyou: This is not for everyone, what is the main thing?Low- and middle-income groups, vulnerable groups, and students from colleges and universities who have graduated since the epidemic and are currently in school. Of course, I also explained that colleges and universities, including universities, graduate students, and doctors. These students of colleges and universities, because they are now facing new difficulties in finding employment. I also agree with some colleagues that if the capital is in the hands of the younger generation, they will not be able to spend money, but will be too good at spending, so I think this kind of cash distribution is still an important option.
The second is to increase grain purchases, feed back to farmers, and stimulate domestic demand. It is not just to stimulate domestic demand, but to make him really have a stronger sense of gain than the original, I have repeatedly said that the peasant group has made 70 years of contributions, the first 30 years of industrial and agricultural scissors poor, the last 40 years of urban and rural land scissors poor, that is, only from the perspective of pragmatism, now to stimulate domestic demand, also need the vast rural areas, the need for peasant brothers. When we enter the post-industrial era, we really need to feed back to the farmers, who have contributed for so many years and can greatly promote urbanization. Of course, in the long run, there are too many structural reforms involved, and it is really not easy, and it is no longer the deep-water area that I talked about in the previous two years, and it is more difficult than the deep-water area now, but I think we still have a way.
What is the potential of China's economy?In fact, as long as you think correctly, there are many ways, not impossible.
Phoenix Net Finance "Phoenix Family Lounge": What about investment?Do you think there will be some big changes in the ** investment or corporate investment in 2024?
Guan Qingyou: Investment, we think that the manufacturing industry will maintain a relatively good situation, because now we see the potential of China's manufacturing competition, the competitiveness of China's manufacturing industry, is increasing at a speed that is visible to the naked eye, which is also our confidence.
In the area of infrastructure construction, with the 1 trillion yuan national debt used for disaster prevention and mitigation, I think there will also be some improvement. Real estate investment may still be relatively sluggish, which has something to do with our overall understanding of real estate and real estate policies. At the moment, we basically think that we need to find the bottom of real estate, because we have not been through this stage. This process of finding the bottom of real estate is very uncomfortable for any country.
Phoenix Finance "Phoenix Family Lounge": Under the traditional economic cycle, individuals and enterprises are more susceptible to this cyclical impact. So how should we look at it rationally now, under the influence of this cycle, this kind of wealth, whether it is a change in the wealth of individuals or companies?How to cross the cycle?
Guan Qingyou: I think it's normal to encounter cycles, in fact, to put it simply, it is to do what you determine to cope with the uncertainty of the future, and at the same time strive to improve your professional ability and cognitive ability. That is, you need to see the market clearly, see the changes in the world clearly, and respond to all changes without change.
A lot of times you know the ins and outs, you have some coping, and that's a situation. The second way you know you can't do anything about it. The third is that you know that you are also affected by the impact, so you try to be the first one.
Phoenix Net Finance "Phoenix Family Lounge": For example, how to solve this problem of shrinking assets now?
Guan Qingyou: The shrinkage of assets is nothing more than that you have to adjust the leverage, adjust the asset structure, or you have to work hard to bear it, because when this situation happens, it is actually a little late. So I think for more people, it's about seeing the situation clearly and using their own certainty to deal with a lot of uncertainty.
Phoenix Finance "Phoenix Family Lounge": What about the company?You talked earlier about how companies should make money from organic growth
Guan Qingyou: Enterprises are nothing more than these options, either to open up the second curve, or to continue to attack deeply on the original track, or even to have enough involution ability, how to adapt to involution?One is to become the king of volumes, and the second is that you escape from involution, surpass involution, and change tracks.
Guan Qingyou: Of course, it's easy to say, but it's actually very difficult to do. In every era, only a small number of people can transcend the so-called involution, but everyone hopes that they are that small group, and we can only wish our listeners and viewers to become that small group of people.