How to achieve financial power?Wu Xiaoqiu, former vice president of Chinese University of China and president of the National Institute of Financial Research, said that there are three paths - take the road of marketization, rule of law, and internationalization.
At the 2023 Dishui Lake Emerging Finance Conference held on December 8, Wu Xiaoqiu said that among the three paths, internationalization is the difficulty, and the rule of law is an important foundation.
At the end of October, the first financial work conference put forward the goal of "accelerating the construction of a financial power", and clearly required to do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance, and strive to promote high-level financial opening-up.
Wu Xiaoqiu said that in a sense, it is more difficult to achieve a financial power than to achieve an economic power, a science and technology power, an education power, and a military power. Because the financial power must be internationalized, and the local currency must be an international currency, this requires the promotion of the free trading of the renminbi and the internationalization of the renminbi.
At the same time, the important criteria for a financial power also include: strong resource allocation function, wealth management function, diversified business formats, diversified functions, and good risk management and control capabilities.
In addition, a financial power is the embodiment of soft power, reflecting a country's strong comprehensive credit capacity, that is, it has a high prestige in the international community, a sound legal system, a good contract spirit and transparency.
Wu Xiaoqiu said that the "finance" in the financial power is modern finance, and the cornerstone of modern finance is the capital market. Therefore, in addition to the characteristics of RMB, international financial center, function, business format, and national comprehensive credit level, the core part of a financial power is the capital market, so there are three paths to achieve a financial power:
First, it is necessary to take the road of marketization, and only marketization can realize the diversification of financial formats. Wu Xiaoqiu believes that the financial needs of the society are very diverse, and they need to be met by diversified financial formats, and diversified financial formats will form diversified financial functions, so the structural reform and market-oriented reform of finance are the most important. Among them, the focus of financial structural reform is to promote the development of the capital market through disintermediation mechanism and scientific and technological progress, so the development of the capital market is an important fulcrum of financial structural reform.
Second, it is necessary to take the road of rule of law. This is the most important foundation of a financial powerhouse. Because finance reflects the country's comprehensive credit level, it must move forward in the direction of improving the rule of law in the future, including the spirit of contract.
The third is to take the road of internationalization. "Closure will not accomplish the goal of becoming a financial powerhouse. Wu Xiaoqiu said that internationalization includes two levels, one is how to further promote the reform of free trading of RMB and achieve the goal of free trading. The internationalization of the renminbi is an important symbol of financial power. Second, it is necessary to further open up China's capital market. He said that at present, the proportion of foreign investors in the domestic capital market is not high, only 45%。Comparatively speaking, the U.S. capital market accounts for about 185%, because China's economic structure is similar to that of the United States, endogenous capital plays a huge role, so if the proportion of foreign investors from the current 45% grew to 185%, which probably has the market foundation of a financial powerhouse.
After clarifying the above three paths, Wu Xiaoqiu said that the difficulty of a financial power is internationalization, focusing on the development of the capital market, and the current capital market is still far from the market goal of a financial power.
At present, the capital market is only a financing market, and it must be turned into an investment market, which requires reform and the road of the registration system. Wu Xiaoqiu said that in the process of implementing the registration system, three conditions must also be adhered to: transparency, fairness of intermediaries, and strict legal protection. If these three conditions are missing, there will be a big problem with the registration system. Therefore, from this point of view, China's capital market needs to be thoroughly reformed.
Wu Xiaoqiu believes that the capital market should provide convenience for the financing of listed companies, which is incorrect, but to provide a good wealth management mechanism for the society and turn it into an investment market, which is a key point in realizing a financial power.
Speaker Wu Xiaoqiu is the former vice president of Renmin University of Chinese, the dean of the China Capital Market Research Institute, and @人大重阳a first-class professor of finance