Xu Hongcai, Deputy Director of the Economic Policy Committee of the Chinese Society for Policy Sciences and Director of the Economic Research Center of the Chinese Western Returned Scholars Association **Courtesy of the interviewee.
Economic Observer reporter Li XiaodanAt the beginning of the new year, the irrationality of China's capital market has attracted the attention of all walks of life. On the next step of China's financial reform and China's economic development, the Economic Observer interviewed Dr. Xu Hongcai, a well-known economist. Xu Hongcai is currently the deputy director of the Economic Policy Committee of the Chinese Society for Policy Sciences and the director of the Economic Research Center of the China European and American Scholars Association. Xu Hongcai said, "The reform and development of the financial market must adhere to the direction of marketization, rule of law and internationalization, and create a good financial ecology." Recently, China's expansion of financial opening-up has released an important policy signal, completely liberalizing the restrictions on the investment ratio of banks and insurance institutions by foreign-funded financial institutions, welcoming all kinds of domestic and foreign market entities, including state-owned, foreign-funded and private capital, to carry out full competition, and improve the efficiency of financial services in the real economy through orderly competition, marking a major step forward in China's financial opening-up. ”
Xu Hongcai believes that non-competition, especially the failure to compete fairly, will be a pool of stagnant water; Unfair competition will inevitably distort the allocation of resources, reduce the efficiency of macroeconomic operation, and lead to inherent instability in economic operation.
For more than 30 years, Xu Hongcai has adhered to the original intention of "helping the people through the world" and has paid close attention to hot issues in the real economic operation. In 1994, he proposed for the first time in the article "Comparative Study of the Business Model of State-owned Assets" to establish a national investment **, which clarified that the people held property rights in state-owned enterprises and entrusted them to a professional management agency to manage them to promote the transaction and circulation of state-owned property rights. In 1994, I won the first prize of the "Wanguo Cup" and won the first prize of the state-owned assets management model, and boldly put forward a point of view: to improve the efficiency of state-owned assets, the key is to implement first-class management of state-owned assets and expand the role of the market in the allocation of resources. The market-oriented operation of state-owned assets is to allow state-owned equity to circulate in an orderly manner through the market, and at the same time cultivate institutional investors to promote the healthy development of China's capital market. ”
At the end of 2023, in order to cope with the complex domestic and foreign situation and the downward pressure on the economy, the ** Economic Work Conference proposed to expand effective investment in the new year. In this regard, Xu Hongcai said that to expand profitable investment, we must give play to the role of the capital market. From the Third Plenary Session of the 18th CPC Central Committee to the 20th National Congress of the Communist Party of China, the development of direct financing and the deepening of capital market reform have been emphasized.
China's capital market in 2024 is off to a bad start, and irrationality has appeared, which has attracted global attention and heated discussions. Xu Hongcai believes that what we need to do now is not to give up the comprehensive registration system reform implemented in the early stage, but to continuously improve the relevant systems, further promote reform, opening up and innovation, boost the confidence of small and medium-sized investors with greater efforts, make the capital market active, support enterprise innovation and industrial transformation and upgrading, make state-owned capital more efficient, and let private capital more assured and bold to participate in the development of innovation and emerging industries.
Xu Hongcai's policy recommendations are usually based on his market research and hands-on practice, so they are also more down-to-earth. In July 1996, Xu Hongcai graduated from the Chinese Academy of Social Sciences with a doctorate and joined the National Financial Claims Management Office of the People's Bank of China. From 1998 to 2010, he successively served as the head of GF** Shanghai Headquarters, the vice president of Beijing Science and Technology Venture Capital Company, and the professor of finance at Capital University of Economics and Technology. At the beginning of 2010, he joined the China Center for International Economic Exchanges, a national high-end think tank, and successively served as Minister of Information, Minister of Economic Research and Deputy Chief Economist. As an economist, Xu Hongcai can be described as a well-written. Over the past 30 years, he has published monographs such as "The Great Choice: Launching a New Round of Reform and Opening-up", "The Great Transformation: Exploring a New Path for China's Economic Development", "The Era of Change: China and Global Economic Governance", and "The Financial Strategy of a Great Power: The Strategy and Direction of China's Financial Power". He is the editor-in-chief of "Wages, Exchange Rates and Surpluses: The Path Choice of China's Economic Rebalancing", "The Complete Book of Investment Operation", "Investment Banking" and "Investment". He has published more than 400 articles and research reports, and many internal reports have received important instructions from national leaders, promoting major national strategic decisions.
Xu Hongcai. The following is a transcript of the interview
Economic Observer: From an assistant engineer of Sinopec to the head of GF** Shanghai headquarters, to a vice president of a venture capital company and an economic policy research scholar, how did you embark on the road of economic research?
Xu Hongcai. In 1977, the resumption of China's college entrance examination opened the door for a generation to change the destiny of a generation, and I was lucky to catch up. In September 1978, I graduated from junior high school, participated in the provincial unified examination, and achieved more than 100 points higher than the admission score line of the provincial key high school, and was admitted to Anhui Chemical Engineering School, majoring in organic polymers, when I was 14 years old. At that time, the principal of my middle school did my parents' work and asked me to study in a provincial key high school, but I didn't go. Because at that time, the state package distribution for secondary school graduates was able to eat commercial grain. It was my dream when I was a teenager to go to work in a factory, and for a rural child facing the loess with her back to the sky, it meant changing her fate.
After graduating from secondary school in July 1981, I was assigned to work in Anqing Petrochemical General Plant, when I was 17 years old. I spent the entire 80s in a factory, and I started to pay attention to society and think about some life issues outside of work. In the early 80s of the last century, various Western currents of thought flocked to the city. I was engaged in engineering technology in the factory, and I had a lot of time to learn about these trends of thought, which deepened my understanding of society. During the nine years I worked in the factory, I read a lot of books on literature, history and philosophy, and at my own expense I attended the Chinese and Chinese Language and Culture Self-study University, the correspondence course of the philosophy college of Anhui University, and the graduate class of comparative Chinese and foreign cultures of Peking University, and also took the national English college self-study examination. At that time, I also read some classic works, such as Capital (volumes 1-3), and I didn't seem to understand many theories, so I had the idea of continuing my studies. At that time, I had to get the signature of the leader of the work unit to take any exam, so I worked hard with the leader and finally got my wish. In 1990, I was admitted to Chinese Renmin University to study for a master's degree in philosophy.
Economic Observer: After coming to Beijing from Anqing, what touched you the most?
Xu Hongcai. When I was a graduate student at the Chinese People's University, an important historical event I encountered was the speech of the Southern Tour in 1992, which further established reform and opening up, unswervingly taking economic construction as the center, and that the market is not the patent of capitalism, socialism also has a market, and capitalism also has a plan. At this time, I set the goal of further study, so in 1993, I was admitted to the Institute of Industrial Economics of the Chinese Academy of Social Sciences for a Ph.D. degree, and I was the first to be admitted to the school, under the supervision of the famous economist Professor Wang Haibo. Mr. Wang is an authoritative expert in the field of industrial economic benefits and the history of China's industrial economy in China, and his rigorous academic attitude has had a positive impact on my life.
In addition to completing the required professional courses, I also participated in an English course jointly sponsored by the graduate school and the University of California, Los Angeles, and tried to make up for the shortcomings of English. Every day I finished my homework until 1 a.m., got up at 6 a.m., and didn't sleep at noon, it's really not easy to look back on it now. At that time, Fan Gang invited young and middle-aged scholars such as Yu Yongding, Zhang Weiying, and Hai Wen, who had just returned to China from Europe and the United States to systematically teach us courses such as Advanced Macroeconomics, Advanced Microeconomics, and Advanced Econometrics, using the original English textbooks, which helped me initially form a theoretical framework for engaging in economic research. Looking back now, I am grateful for Fan Gang's vision.
Economic Observer: When you were studying for a doctorate, you participated in a prize-winning essay competition and won the only first prize in the country.
Xu Hongcai. During my Ph.D., I was interested in studying capital markets and institutional investors, at a time when China's capital market was just starting, and there were many phenomena that are still being discussed over and over again. In March 1993, the Shanghai Composite Index fell from 1,500 points to 16 consecutive months of sluggishness, falling to 325 points at the end of July 1994. China's top investors have experienced a baptism of blood, where will China's capital market go? In July 1994, Shanghai Wanguo ** Company and China ** Daily jointly organized a prize-winning essay contest, calling on people of insight across the country to discuss this issue: set up a first prize with a bonus of 20,000 yuan; two second prizes, 10,000 yuan each; 10 encouragement prizes, 5,000 yuan each. I spent an all-night writing an article "A Comparative Study on the Business Model of State-owned Assets", and rode my bicycle to the post office early in the morning to send it with a ** letter. A week later, I received a notice that I won the only first prize in the country. Liu Hongru, then chairman of the China Securities Regulatory Commission, was the chief judge, and the judges included Li Yining, Dong Furen, Xiao Zhuoji, Chen Biaoru and other famous economists. In July 1994, the family of three finally reunited at the Graduate School of the Chinese Academy of Social Sciences, and began our life in Beijing. In a sense, this article marks the beginning of my life path of economic and financial research.
Economic Observer: Why did you choose the research topic of state-owned asset operation model?
Xu Hongcai. In my article "Comparative Study of State-owned Assets Management Model", I proposed for the first time the implementation of first-class management of state-owned assets, which is indeed a bold idea. The basic idea is to establish a national investment, as the main body of state-owned enterprise investment and shareholding, relying on the capital market to efficiently operate state-owned assets. At that time, China's investment industry was just starting, and the developed capital market was dominated by institutional investors represented by common and pension funds. The stones of the mountains can be used to attack jade. Through studying the practices of mature international capital markets, I have gradually formed an idea of the market-oriented operation of state-owned assets. At the end of the 1990s, China's first-class industry began to develop rapidly, and began to build a variety of state-owned capital operation platforms, through diversification of investment, portfolio investment, to promote state-owned equity transactions and strategic restructuring of state-owned enterprises.
During my PhD, I gained a deeper understanding of the capital market. In 1994-1995, I organized the writing of the "Complete Book of Investment** Operations" and translated the "American Investment Company Act of 1940" for the first time, which marked the era of institutional investors dominating the U.S. capital market. This is of great significance for China's capital market, which is still in its infancy. After two years of hard work by more than 60 experts and scholars, this monumental work of more than 260,000 words finally came out, and Liu Hongru, the first chairman of the China Securities Regulatory Commission, wrote a preface, which was published by China Financial Publishing House in 1996. In October 1995, I was invited by Dr. Mark Mobius, the "Father of Global Emerging Markets", to attend the Global Emerging Markets** Investment Conference in Los Angeles, which was my first speech in English abroad. Also speaking on the stage was Anthony Neoh, then Chairman of the Securities and Futures Commission of Hong Kong, China, and I was a PhD student who had not yet graduated. The topic of my Ph.D. is investment and financial development, and I am the first Ph.D. in the field of China's capital market to focus on investment.
In 1996, I was admitted to the head office of the People's Bank of China and worked in the National Financial Claims Management Office, mainly responsible for corporate mergers and bankruptcy and bank bad debt write-off. In my actual work, I have come into contact with a large number of thorny economic cases, especially the solution to the problem of restructuring state-owned enterprises, involving the resettlement of laid-off employees and the write-off of bad debts in banks. In my work, I gradually gained a concrete understanding of the operation of the banking and financial system, and I also deeply felt that the work of the agency has limitations. At this time, Dr. Xian was committed to building a team of PhDs in China's capital market, and I wanted to experience the vigorous capital market at that time, so I went to Shanghai in 1998 and started my career in the capital market.
Economic Observer: Returning to academic research from the market, what do you think are the differences between the two, and what are the same?
Xu Hongcai. From my personal experience, it is a process to shift from actual combat in the capital market to academic research, and the common point of both is to find the laws of economic and capital market operation, the former is to explore the market, and the latter is to promote the implementation of relevant academic research and policies through research and coordination of resources.
After the Asian financial crisis in 1997, I edited and published China's first textbook on "Investment Banking", and invited Liu Hongru to write the preface. In 2001, two major events, one was China's accession to the WTO and the other was the "9/11" incident in the United States, both of which had a profound impact on China and global finance. In 2001, after the NASDAQ bubble burst, I returned to Zhongguancun in Beijing to do venture capital, when PE and VC were just being accepted in China. In 2003, I returned to the Department of Finance of Capital University of Economics and Economics as a professor. In 2008, the international financial crisis prompted me to edit and publish the textbook "** Investment" and set up a course on financial risk management.
At the beginning of 2009, the China Center for International Economic Exchanges was established to recruit talents at home and abroad, aiming to build a high-end think tank in China and provide intellectual support for high-level national strategic decision-making. More than 2,000 doctors and postdocs have signed up, and 8 people have been admitted, and I am the first to be admitted. After that, he worked here for ten years, from the director of the information department, the director of the economic research department, and then to the deputy chief economist. On April 1, 2019, I left.
My academic research experience is divided into two stages, from micro to macro before and after the international financial crisis in 2008. Before 2008, I focused on microfinance issues, especially financial markets and capital markets. After the financial crisis, I turned to macro-financial economics and the global economy. I have personally run nearly 400 domestic listed companies, researched all walks of life, and currently served as an independent non-executive director in four financial institutions (two are Fortune 500 companies and two are Hong Kong listed companies), involving various financial businesses such as banks and insurance, which is also helpful for me to engage in macroeconomic research.
Economic Observer: In the past ten years of work as a think tank, what policy recommendations have you personally experienced?
Xu Hongcai. Working in a think tank, I will often participate in field research and write internal reference reports. In the past ten years, I have personally revised more than 2,000 internal reference reports, and some of the reports I wrote have been recognized and adopted by the high-level management, promoting national strategic decision-making.
For example, around 2010, Chinese companies encountered many problems in the process of "going global". After China's accession to the WTO, the foreign trade surplus is due to our advantages in raw materials and labor, enterprises will sell foreign exchange to banks, banks will sell foreign exchange to banks, and the central bank will buy US Treasury bonds to form foreign exchange reserves. But in 2010, with the depreciation of the dollar and the appreciation of the renminbi, new problems emerged. Chinese workers work hard to sell cheap and high-quality goods to the United States, and the United States pays dollars, and we use dollars to buy U.S. Treasury bonds to support the U.S. fiscal balance. I don't think this cycle makes sense. The question is, how can domestic companies go out because they lack dollars in their hands? At that time, I wrote two reports, suggesting that part of the foreign exchange reserves should be entrusted to commercial banks, which in turn would lend to industrial and commercial enterprises, so as to support domestic enterprises to go global.
In 2008, the China Development Bank was positioned as a commercial bank and transformed according to this plan. In my opinion, the market plays a decisive role in the allocation of resources, but the market will fail, and this is where the lack of market function should be compensated. What if both the market fails? At this time, we also need a starting point, that is, development finance. The China Development Bank should reflect the national strategic orientation and make up for the shortcomings of the market and the world. In 2013, I submitted two internal reports, recommending that CDB be reclassified as a development financial institution, which was approved by senior leaders. In recent years, CDB has re-established itself as a development financial institution, playing an irreplaceable role in shantytown renovation and infrastructure investment, especially in infrastructure investment in ports, terminals, airports, roads, railways and other infrastructure in the Belt and Road countries.
On June 16, 2015, the Chief Economist of the European Bank for Reconstruction and Development (EBRD) visited the CEC, and I suggested to him that Chinese investment should be absorbed into EBRD, and asked him to convey to EU President Jean-Claude Juncker to promote the cooperation between EBRD and the Asian Infrastructure Investment Bank, and the Juncker Investment Plan to connect with the Belt and Road Initiative. At the same time, China agrees that EBRD set up a branch in Shanghai, issue panda bonds, and cooperate with the AIIB to jointly promote the construction of the "Belt and Road". He also thought it was a good idea, and I suggested that he return to London as soon as possible to communicate with the Brussels side. On the morning of the 17th, I completed the report, and on the 18th, I received instructions from the high-level authorities, instructing the leaders of relevant departments to study it quickly. In September of that year, the People's Bank of China signed a memorandum of cooperation with ebrd; At the end of 2015, the Board of Directors of EBRD approved the investment of Chinese investment, which opened a new history of financial cooperation between China and the EU.
These are some of the reports and recommendations I wrote when I was working at a think tank, and they were adopted by senior leaders. Looking back now, every survey, every report, is still exciting.
Economic Observer: What important nodes do you think China's macroeconomic regulation and control has experienced in the past 40 years?
Xu Hongcai. As for China's economic cycle, I think it can be roughly divided into the following important nodes. The first node was the Third Plenary Session of the 11th Central Committee held at the end of 1978. The meeting established the line of reform and opening up and made it clear that economic construction should be the central task, which was an important turning point in China's economic development.
The second turning point was the speech of the first southern tour in early 1992, which further established the direction of market economic development. In the 80s of the last century, there has been a debate on the question of whether it is a planned commodity economy or a socialist market economy, and the important background of this debate is that the market economy was regarded as a capitalist patent, and the advantage of China's system is to engage in a planned economy; However, the traditional highly centralized planned economy has been proved to be a failure by historical practice. Another important diplomatic change that has also kept the debate at a standstill is the overlap in the timing of China's reform and opening-up with the establishment of diplomatic relations between China and the United States in January 1979. As soon as the Third Plenum ended, diplomatic relations were established with the United States, and at that time there was a view that reform and opening up should be carried out. Therefore, the speech of the 1992 Southern Tour was to set this argument in order, to correct deviations in thinking, and to form a broad consensus. **Say loudly: Don't argue, keep your head down. Since then, the theory of "white cats and black cats" has run through China's entire reform and opening up, stimulated the overall potential of the whole people, and brought earth-shaking changes in many aspects such as township enterprises, special zones, private economy, and the world.
China's capital market began to take off in the 90s of the last century, and state-owned enterprises gradually transformed from state-owned enterprises integrating government and enterprises to state-owned enterprises in the true sense. After the implementation of the shareholding system reform, state-owned enterprises have solved the problem of their operating mechanism of "independent operation, self-responsibility for profits and losses, self-restraint, and self-development."
The third node is China's accession to the WTO in 2001, China can finally join the global division of labor system in an all-round way, continue to promote the opening up from manufacturing to service industries, and continue to reduce tariffs; At the same time, China has also begun to learn to follow international rules, economic and trade rules, accelerate the promotion of investment facilitation, and lay the foundation for the construction of a new development pattern of dual circulation. In 2010, China's total GDP surpassed Japan's for the first time, becoming the world's second largest economy.
The fourth node is that since the 18th National Congress of the Communist Party of China, that is, after 2018, China's economy has entered a new normal. Its important feature is that in the past, the development model of relying on investment to drive foreign trade exports and expand extension was unsustainable, and China's economy should take the path of high-quality development, connotative development and innovative development. Everyone realized that the economic trend showed an "L-shaped", and the economic growth rate continued to decline, but the total economic volume maintained growth, and China's GDP exceeded 200 trillion yuan at the end of the "13th Five-Year Plan".
The Third Plenary Session of the 18th Central Committee of the Communist Party of China put forward 60 reform opinions, establishing that the market plays a decisive role in the allocation of resources, and at the same time emphasizing the need to play a good role. This line of thinking is very clear, and it has not changed until now, and optimizing the business environment, achieving fair competition, and respecting international economic and trade rules are all moving in this direction.
Now we have entered the fifth stage, which is the post-epidemic era. The current situation is still relatively complex, with profound changes in the international environment, including the restructuring of global value chains, which are more prominent than before the pandemic.
Economic Observer: In the post-epidemic era, how can China's economic development find certainty?
Xu Hongcai. China's economy is facing many new challenges, but I think the certainty of the external environment is rising.
The first certainty is that after the adjustment in 2023, the endogenous momentum of the world economy is accumulating, and the positive factors are increasing. For example, the global ** will shrink by 5% in 2023 and may grow by 3% in 20243%；Cross-border investment grew by 20% last year and is likely to be positive in 2024.
The second certainty is that global inflationary pressures have weakened markedly. Data for December 2023 showed that inflation in the United States fell to 34%。In 2022, the peak during the Russia-Ukraine war exceeded 10%, and it should be said that the effect of the Fed's tightening monetary policy and major economies is still obvious. Therefore, at the end of last year, the Fed stopped raising interest rates, and the market expects that there may be three interest rate cuts in 2024, which means that the pressure on RMB depreciation will decrease, and the marginal easing policy space for banks to cut RRR and interest rates is opening.
The third certainty is that relations between major countries, especially between China and the United States, have stopped falling and stabilizing. In the past two years, the Western world's practice of friendly shore outsourcing, near-shore outsourcing, decoupling and chain breaking, and "small courtyards and high walls" has indeed brought some negative effects. Now everyone thinks that this will cause both sides to lose, and they all hope to get back the ballast stone of economic and trade cooperation.
The fourth certainty is that the geopolitical conflict between Russia and Ukraine is currently in a stalemate, but I believe that sooner or later it will end peacefully. In the past two years, human society has been put to the test, and this conflict has not turned into a world war, nor has there been a nuclear war; The Kazakh-Israeli conflict did not turn into a war in the Middle East, which means that the ability of human society to manage the risk of war has increased.
The fifth certainty is that the 20th National Congress of the Communist Party of China established the strategic policy of continuing to deepen reform and expand opening up, especially to promote high-level and high-quality opening up, and at the end of last year, the ** economic work conference further emphasized the guiding ideology of seeking progress while maintaining stability, promoting stability with progress and establishing first and then breaking down.
Economic Observer: What are your views on China's economy in the new year?
Xu Hongcai. In the future of China's economic development, the problem is not outside, but depends on solving its own problems, including real estate and potential financial risks. Real estate will certainly not go back to the past, and it will take two or three years to adjust. There is no policy alternative to the real estate sector in the short term. The rapid economic growth of China over the past 20 years, thanks to the construction and real estate industries, has now come to an end.
The problem of China's real economy is overcapacity. China is a big and powerful manufacturing country, and its production capacity is formed in the pattern of globalization and serves globalization. However, now the global demand is sluggish, coupled with the existence of "friendly shore outsourcing", "nearshore outsourcing", "decoupling and broken chain" and "de-risking", etc., resulting in a sharp decline in China's import orders from Europe, the United States and Japan, and it was not until the end of last year that China and the United States did not improve after the San Francisco summit between China and the United States. It is very important for China to stabilize foreign trade, because the domestic excess capacity cannot be digested by itself, and it is necessary to rely on the external market to solve the problem of foreign trade import and export of more than 40 trillion yuan. This is also an objective requirement for the implementation of the "new development pattern of dual circulation".
To solve their own problems, we must rely on reform, opening up and innovation, and the economic work conference and financial work conference have been systematically deployed. In 2023, China's economy will achieve 52% growth, contributing 30% to global GDP. China's economic growth is expected to be 4Around 8%, the real growth depends on the strength of the policy. ** With limited financial resources, it is necessary to prevent and control local debt risks, and do not expect too much from expansionary fiscal policies. It is expected that China's economy will continue to recover steadily in 2024, and the economic growth rate will decline, and the medium- and long-term "L-shaped" trend will not change. There is still great potential for China's economic development in the future.
Economic Observer: How do you understand the role of finance in the economy and how do you understand financial regulation?
Xu Hongcai. Finance must serve the real economy. Finance is different from the real economy and has its own special operating rules, because finance has to deal with monetary funds and go hand in hand with risks. This is necessary to promote the effective allocation of monetary funds across time and space. The efficiency of the financial market directly affects the efficiency of monetary policy and the efficiency of financial services for the real economy, so it is necessary to give full play to the role of the market mechanism.
In the reform and development of the financial market, we must adhere to the direction of marketization, rule of law, and internationalization, and create a good financial ecology. Recently, China's expansion of financial opening-up has released an important policy signal, completely liberalizing the restrictions on the investment ratio of banks and insurance institutions by foreign-funded financial institutions, welcoming all kinds of domestic and foreign market entities, including state-owned, foreign-funded and private capital, to carry out full competition, and improve the efficiency of financial services in the real economy through orderly competition, marking a major step forward in China's financial opening-up. No competition, especially fair competition, will be a stagnant pool; Unfair competition will inevitably distort the allocation of resources, reduce the efficiency of macroeconomic operation, and lead to inherent instability in economic operation.
At the same time, why is financial regulation necessary? Because there are times when the market fails. In order to bring into play the role of macroeconomic policies in counter-cyclical adjustment and cross-cyclical regulation and control, macro-prudential and micro-prudential should also be combined. The prudential supervision of micro-financial institutions is to prevent them from acting arbitrarily, and macro-prudential should also prevent the pro-cyclical behavior of financial institutions from producing synthetic fallacies. Institutional investors, who are supposed to be the "stabilizers" of the market, have become a source of market volatility, indicating that something is wrong with regulation. All market entities must operate in a standardized manner under the legal framework, and must severely punish financial institutions that violate the rules.
Economic Observer: Recently, the market has fluctuated greatly, what are the reasons for the volatility, and how to stabilize the financial market?
Xu Hongcai. **It is very sensitive to economic information, and the overall performance of the real economy is still relatively weak. At the beginning of the new year, China's economy continued to recover steadily and improve last year, but the foundation is not yet solid. Potential risks in some areas are also gradually emerging: the first is that the adjustment of the real estate industry has not yet ended; the second is local ** debt, where local potential risks loom; The third is that there is still uncertainty in the external environment, and there may still be geopolitical "black swan" events, resulting in commodity volatility. The recent ** volatility has triggered a discussion on negating the reform of the registration system in the early stage and whether to cancel the short-selling mechanism. In my opinion, there is no problem with the registration system itself, but the relevant system needs to be improved; The short selling itself is a neutral operation, and there are long and short positions to call the market economy. It is necessary to create a law-based and standardized market environment for the best and let investors make rational choices. In addition to optimizing the relevant systems, the key is to improve the quality of listed companies and solve outstanding problems in the real economy.