From December 16th to 17th, the 2023 China Political and Credit Industry Summit Forum was successfully held, with the theme of "Major Economic and Social Transformation in Chinese-style Modernization and Improving the Quality and Efficiency of Political and Credit Financial Services", and delved into the current major topics such as financial power and digital economy in the field of political and credit technology.
*Professor Wu Bo, Senior Advisor of the Institute of Political and Credit Studies of the University of Finance and Economics and Chairman of the Global Think Tank of the United Nations World Silk Road Forum, gave a keynote speech on "Political and Credit Problems and Solutions in the Context of China's Systematic Debt".
Professor Wu Bo believes that China's current round of debt is in the context of the global debt de-debt cycle and the historical cycle of the world productivity revolution, compared with the United States in the cycle of debt issuance, China put forward the idea of systematic debt, which is a wiser choice, which is the right way to enhance the credit. Professor Wu Bo suggested that the debt should be reduced by reducing the Gini coefficient, optimizing the structure of the debt side, and expanding and strengthening the asset side.
Professor Wu Bo proposed the formulation of a "package of debt plan" from the Politburo meeting in July, and believed that this round of debt is divided into ** debt and localized debt, the first debt is focused on the vertical field, and the localization debt is focused on the debt in the region, the goal is more acute, and the formulation of the package debt package needs to be innovative and find new ideas.
China's bonds are in the historical cycle of global de-debt and the cycle of the world's productivity revolution
Professor Wu Bo believes that we need to look at China's debt from the historical cycle of global dedebt and the context of the world productivity revolution.
First of all, China's current round of debt is in the historical context of the great de-debt cycle between China and the United States and even the world. From this background, it can be seen that the United States is still in a cycle of "adding debt". The epidemic has accelerated the huge over-issuance of U.S. bonds, especially the direct payment of money by residents to maintain economic operation, resulting in the rapid expansion of the total scale of U.S. bonds.
The dollar, as the world's currency, has alleviated the debt crisis by raising interest rates to attract capital from all over the world to buy dollar assets, but it has brought asset depreciation to non-dollar countries, which on the surface has alleviated the dollar debt crisis, but in today's increasingly enlightened and fair and transparent environment, this model cannot be sustained.
The root cause of this cycle of debt in the United States is the monopoly of American financial capital, which has led to a serious regression in the freedom, diversification, and market vitality of the American market. Currency globalization is a double-edged sword, although it can harvest the world, but it also pays the price of shrinking and hollowing out the manufacturing industry.
Professor Wu Bo believes that the US dollar debt problem has brought some enlightenment to China's debt:
First, it is necessary to have the idea of systematizing debts, including the separation of political credit and platform credit, and clarifying the use of funds, which is the basic principle to solve the problem of continuous increase in debt
Second, China needs the diversity of market players, encourages free competition to prevent monopolies, and prevents excessive intervention, while in terms of industry, China needs to speed up the pace of keeping up with the transformation of traditional manufacturing to high-tech industries;
Third, China is actively promoting the building of a community with a shared future for mankind on the road of RMB internationalization, and will not harvest the world through tidal currency collection and release in the future.
Second, the debt should be viewed in the context of the restoration of Eastern and Western civilizations and the Sino-US game. The United States has promoted high welfareism with debt, and the currency has been printed indiscriminately, and the result is that on the one hand, it has cultivated a "lazy" culture among some people, and on the other hand, it has caused the "hollowing" of the dollar.
Compared with the United States, China has maintained a "sober" and taken the initiative to "live a hard life", while China has accumulated a large number of foreign reserves in the long-term foreign world, and on the other hand, it has also cultivated a large number of entrepreneurs, engineers, and scientists.
By analyzing the ways in which China and the United States solve the debt problem, Professor Wu Bo pointed out that the same is to resolve debt risks, and we can see that the means and effects of China and the United States are opposite.
China's debt is based on national infrastructure construction and people's well-being, and is a debt for a community with a shared future for mankind and for the people, while the US debt is mainly caused by the US financial oligarchy and monopoly capital, which have become extreme.
As the global debt removal becomes more difficult, China has chosen a difficult but correct path
A global outlook for the global debt cycle. With the accumulation of global resources, debt expansion is moving away from the bottom line of global market demand, leading to an accelerated evolution of global resources (both in the Eastern and Western camps) towards oligopoly and monopoly.
This trend will cause the loss of market vitality and the distortion of the market's leading formation mechanism. Globally, monopoly capital's strong intervention in administrative action can no longer be tolerated, otherwise it will only make it more difficult to resolve global debt.
In the process of reducing debt, China should combine internal and external debt, and prevent the debt expansion of the United States and other Western countries from aggravating domestic debt risks.
Third, China's chemical bonds are still under the historical background of the revolution in the world's productive forces. Due to the leap in science and technology, innovation has accelerated, and old production capacity has been eliminated or even collapsed, which has brought problems to the debt.
With the acceleration of scientific and technological innovation in more than a dozen categories such as artificial intelligence and big data, the explosion of thousands of years of scientific and technological innovation system of human civilization has given birth to networked intelligence and networked civilization, including economy, resources, rights, and even genes, life, individuals, etc., are all networked.
This is a double-edged sword, on the positive side, let us see a very bright future, and we can look forward to the explosion of artificial intelligence in the next 10 years or so;But on the other hand, this kind of technology** will bring about an explosion of geometric multiples of productivity, and the old productivity and production capacity will face the elimination of the speed of light in the next 5-10 years, and many production capacity and jobs must accelerate the embrace of artificial intelligence to cope with the shock.
In order to solve the debt problem, local governments need to cultivate new financial resources from emerging industries, especially from the fundamental solution of the debt problem of artificial intelligence industry opportunities.
Debt is a blockage point in the financial sector to open up internal circulation and external circulation
From the perspective of opening up the blockages of the internal circulation and external circulation of China's economy, the biggest blockage of China's domestic circulation is in the financial system, and the core task of solving the financial blockage is to solve the financial blockage. From the perspective of external circulation, systematic debt is an important link to enhance the security of our external circulation.
From the point of view of the solution of systematic debt with Chinese characteristics, there are three suggestions:
One is to reduce the Gini coefficient [1]. In particular, it is necessary to use the means of distribution in the one-two-three distribution to accomplish our quantitative goal. Whether it is the financial system, the local government, or the fiscal and taxation system, it is especially necessary to establish a sense of comprehensive system reform. For example, the change of the fiscal and taxation system requires a reform that "goes deep into the bone marrow".
1] The Gini coefficient is an important international analysis index used to comprehensively examine the differences in income distribution among residents. When there is a large gap between each person's income, the Gini coefficient is highThe smaller the gap, the lower the Gini coefficient. When everyone in a society has the same income and the income distribution is absolutely equal, the Gini coefficient is 0;When the income of the whole society is concentrated in one person and the income distribution is absolutely unequal, the Gini coefficient is 1. It is generally accepted that the Gini coefficient is less than 02, showing that the income distribution of residents is too even, 02—0.3 is more average, 03—0.4 is reasonable, 04—0.5 is too large and greater than 05 The difference is huge.
The second suggestion is to optimize debt. The first is debt restructuring, and the credit security of the local government must be guaranteed in terms of debt. Because the credit of the local government is closely related to the credit of the local government, China should adhere to zero tolerance for local credit defaults. In the process of debt reduction, how to use fiscal revenue, it is necessary to deal with the combination of short, medium and long-term debts under the guidance of the first and provincial levels.
The third suggestion is to make the asset side bigger and stronger. The strengthening of the asset side can alleviate the pressure on debt. It is necessary to distinguish between operating assets and non-operating assets.
Finally, Professor Wu Bo concluded that systematic debt actually reflects the reflection of the current political, economic and social comprehensive status quo in terms of debt, and needs to be coordinated from land planning, comprehensive management, and so on.
He gives advice on how to solve the debt puzzle:
The first is to go to the local division of labor, give full play to innovation and guide from the policy and technical level.
Second, from the perspective of the system environment, the local government is dominated by provincial-level administrative divisions, and gradually sinks to guide them, mobilize talents and resources, and at the same time give full play to the role of state-owned banks, establish a first-class relief system, and do not take the initiative to detonate and puncture.
In addition, some supporting measures are needed, such as the need for urban investment platforms to optimize the management of existing available resources, dynamically adjust the asset structure, and introduce and allocate high-quality assetsLocal financial institutions should also support industrial development, and can inject the equity of financial institutions into the urban investment platform, or inject the equity of other high-quality enterprises into urban investment, and form an equity premium after listing to consolidate the production end of urban investment.
The 2023 China Government and Credit Industry Summit Forum is co-sponsored by the Institute of Government and Credit of ** University of Finance and Economics, the Institute of Internet Finance and Law of China University of Political Science and Law, the Collaborative Innovation Center for China Financial Development, and the Government and Credit Industry Alliance.
A total of more than 230 representatives from university think tanks, industry experts, local urban investment platforms, well-known law firms, accounting firms and consulting institutions gathered at the forum to discuss the reform and development of political and credit in the process of Chinese-style modernization.