Economy** Author: Guo Ziyuan.
**At the opening ceremony of the seminar on promoting high-quality financial development for major leading cadres at the provincial and ministerial levels, the general secretary emphasized that it is necessary to accelerate the construction of a modern financial system with Chinese characteristics, among which it is necessary to establish and improve a diversified and professional financial product and service system. What is diversity and professionalism? Next, what are the main levers for enriching the financial product and service system? What new policies will be implemented one after another? The reporter interviewed a number of industry insiders.
What is diversity and professionalism?
What is a diversified and professional financial product and service system? "Diversification mainly means that the types of financial products and services should be rich and diverse. Li Guangzi, director of the Banking Research Office of the Institute of Finance of the Chinese Academy of Social Sciences, said. From the perspective of financial products, it should not only include traditional credit, insurance, trust, wealth management, etc., but also innovative financial products used to meet the new financial needs of consumers, such as options, derivatives such as financial products, asset-based products, etc.; From the perspective of financial services, it should include not only financing services, but also investment advisory services, wealth management services, risk management services, etc. The so-called professionalism, Li Guangzi believes that financial products and services should have a high technical content and can effectively meet the different types of financial needs of consumers.
Since the 18th National Congress of the Communist Party of China, China's financial products and service system have been gradually enriched, the financial structure has been continuously optimized, and the adaptability of the proportion of indirect financing and direct financing to China's economic and social development and financial needs has been greatly improved. At present, China's banking industry ranks first in the world in terms of assets, second in the world in terms of insurance market, second in the world in terms of bond market, and first in the world in terms of foreign exchange reserves for 19 consecutive years.
Among them, the development of digital finance, green finance and inclusive finance has been at the forefront of the world. "The development of inclusive finance was proposed by the Third Plenary Session of the 18th Central Committee of the Communist Party of China, and after more than 10 years of development, China's inclusive finance has made great progress. Guo Wuping, director of the Department of Inclusive Finance of the State Administration of Financial Supervision and Administration, said that as of the end of December 2023, the balance of inclusive small and micro enterprise loans reached 2906 trillion yuan, a year-on-year increase of 2327%, which is 13 percent higher than the average growth rate of various loans13 percentage points.
The pension financial service system, which is closely related to the interests of the people, is also gradually improving. "Vigorously develop commercial insurance annuities, and have accumulated a pension scale of more than 6 trillion yuan, covering nearly 100 million people. Yin Jiangao, head of the Property Insurance Supervision Department of the State Financial Supervision and Administration of the People's Republic of China, said that it is necessary to carry out the pilot of pension financial products, promote the pilot of specific pension savings, start the pilot of commercial pension business, and promote the development of the personal pension system.
Despite the results, there is still room for improvement. "Taking the banking industry as an example, although the existing financial products and services have been relatively sufficient, the matching degree with the characteristics of consumers' financial needs is not high, and the quality and efficiency of financial services need to be further improved. Li Guangzi said. On the one hand, there is insufficient support for some key areas related to economic development and transformation, taking science and technology finance as an example, the banking industry does not support scientific and technological innovation activities that are relatively risky and in the early stage, and the scale of investment-loan linkage products is small. On the other hand, financial support for inclusive groups needs to be further improved. For example, with regard to new citizen groups, there is currently a lack of targeted financial products and services.
To this end, the next step is to do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance. Li Guangzi suggested.
Do a good job of "five big articles".
With the approval of the People's Bank of China, the People's Bank of China will set up a credit market department to focus on the work related to the 'five major articles'. People's Bank of China Governor Pan Gongsheng said at a press conference held at the press office on January 24. Previously, the first financial work conference clearly proposed to do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance.
Under the new situation, we will take the structural reform of the financial supply side as the main line, guide financial institutions to return to their origins and focus on their main business, especially around the 'five major articles', improve the adaptability of serving the real economy according to the situation, help the economy with strong finance, and help stabilize the economy with financial stability, so as to provide more powerful financial support for Chinese-style modernization. Li Yunze, Secretary of the Party Committee and Director of the State Administration of Financial Supervision and Administration, said at the 17th Asian Financial Forum in Hong Kong.
Specifically, science and technology financial services will highlight the "multi-level" characteristics. Li Mingxiao, director of the Policy Research Department of the State Administration of Financial Supervision and Administration, said that in the next step, the State Administration of Financial Supervision will work with relevant departments to steadily promote the construction of science and technology innovation financial reform pilot zones, deepen financial support measures for the manufacturing industry, guide financial institutions to implement various policy requirements, and continuously enrich financial products and services. As of the end of December 2023, the balance of loans to high-tech enterprises nationwide increased by 202%, of which medium and long-term loans and credit loans accounted for more than 40%.
Green financial services will be more diversified and differentiated. "Banking and insurance institutions are encouraged to develop climate-friendly green financial products and provide diversified and differentiated financial services on the premise of compliance with laws and regulations and controllable risks, on the basis of commercial sustainability, according to the financing and risk management needs of green and low-carbon projects, and based on their own functional positioning. Li Mingxiao said that it is necessary to broaden the coverage of green insurance, develop green trusts and green leasing, and expand green consumer credit business in an orderly manner.
Inclusive financial services will focus on the characteristics of "universal and beneficial, easy to use and inexpensive". "The criteria for identifying inclusive small and micro loans will be relaxed from the current single-account credit of no more than 10 million yuan to no more than 20 million yuan. Pan Gongsheng said that the continuation of the implementation of inclusive small and micro loan support tools, inclusive pension special re-loans, appropriately increase the amount of re-lending and re-discounting to support agriculture and small enterprises, expand the support objects of carbon emission reduction support tools, expand the scope of support and increase the scale of tools.
Pension financial services will focus on the exclusive commercial pension insurance as the starting point, focusing on the pension security needs of new industries and new business personnel. Yin Jiangao introduced that the exclusive commercial endowment insurance is an inclusive endowment insurance, which is simple to insure, flexible to pay, and stable in income, locked in after the age of 60, and annuitized. "The pilot started in June 2021 and will be normalized in October 2023. As of the end of December 2023, the number of insurance policies is about 740,000, and the cumulative pension reserve scale exceeds 10.6 billion yuan. Yin Jiangao said that next, will further optimize the supply of personal pension-related financial products, according to the characteristics of the personal pension system, study and improve the relevant business supervision rules.
Digital financial services will balance the relationship between "integrity and innovation", and enhance the quality and efficiency of digital financial services for the real economy while ensuring data security and maintaining the bottom line of risks. "We will fully mobilize the enthusiasm and initiative of financial institutions, continuously optimize digital financial products and services, and effectively reduce the financing costs of enterprises. Liu Zhiqing, head of the Statistics and Risk Monitoring Department of the State Administration of Financial Supervision and Administration, said that at the same time, actively expand service channels such as Internet mobile terminals, and reach those groups that are difficult to be covered by traditional financial services through digital means, and continue to improve the inclusiveness and accessibility of financial services.
Enrich cross-border financial products.
Expanding high-level opening up to the outside world is a basic national policy of our country. Pan Gongsheng said that in recent years, the People's Bank of China, together with the mainland financial management department, has launched and optimized arrangements such as Shanghai-Shenzhen-Hong Kong Stock Connect, Bond Connect, Cross-boundary Wealth Management Connect and Swap Connect, which has provided a lot of convenience for overseas investors to allocate Mainland** and bonds through Hong Kong and Hong Kong citizens to purchase mainland wealth management products.
Next, the People's Bank of China and the Hong Kong Monetary Authority will launch a total of six policy measures of "three connections and three conveniences". The "Three Links" refer to the inclusion of bonds under Bond Connect as eligible collateral under the HKMA's RMB liquidity facility, further opening up foreign investors to participate in the onshore bond repurchase business, and issuing implementation rules to enhance the cross-boundary WMC pilot scheme in the Guangdong-Hong Kong-Macao Greater Bay Area. The "three facilitations" refer to the implementation of the policy of facilitating the payment of housing for Hong Kong and Macao residents in the Greater Bay Area, expanding the scope of the pilot project of Shenzhen-Hong Kong cross-border credit investigation cooperation, and deepening the cross-border pilot of e-RMB.
On 24 January, the newly revised Implementation Rules for the Cross-boundary Wealth Management Connect Pilot Program in the Guangdong-Hong Kong-Macao Greater Bay Area (hereinafter referred to as the "Implementation Rules") were officially released, and the channels for residents of the Guangdong-Hong Kong-Macao Greater Bay Area to participate in the Cross-boundary Wealth Management Connect business will be more diversified, and the wealth management products that can be purchased will be more abundant.
Specifically, the Detailed Implementation Rules adjust the conditions for mainland investors to participate in the Southbound Scheme, increasing the quota for individual investors from RMB1 million to RMB3 million, and increasing the participation of ** companies in the pilot; At the same time, the risk level of public offering **investment will be expanded from "R1 to R3" to "R1 to R4" (excluding commodities***), and the business conduct norms of domestic sales institutions and domestic cooperative institutions will be refined and clarified.
Since the pilot of the Cross-boundary Wealth Management Connect, Standard Chartered Bank has found that residents in the Greater Bay Area have a strong sense of financial management and a strong demand for diversified investment and global asset allocation, and related businesses have grown steadily. Standard Chartered Bank's Chief Executive Officer of the Greater Bay Area, Mr Lin Yuandong, said that after the release of the newly revised Implementation Rules, the bank immediately responded positively and promoted product and service upgrades, increasing the number of eligible "Southbound Scheme"** products to more than 140. In addition, in terms of "Northbound Trading" investment products, Standard Chartered Bank will increase RMB deposit products and more than 40 public offerings** with a risk rating of R4**investment**, covering new consumption, new energy, new infrastructure, new manufacturing, new technology and other industries, to provide customers with more choices.
In the next step, the People's Bank of China will work closely with the financial authorities of the Mainland and Hong Kong to jointly promote the implementation of various policies and measures, further optimize financial services, strengthen financial cooperation, and promote the further development of Hong Kong as an international financial center. Xuan Changneng, deputy governor of the People's Bank of China, said.