Yi Gang suggested the establishment of an insurance mechanism for real estate pre sale funds

Mondo Finance Updated on 2024-03-07

Yi Gang, vice chairman of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference, former governor of the People's Bank of China, and chairman of the Council of the China Society for Finance and Banking, said at the meeting that at present, it is necessary to strengthen the coordination and cooperation between financial policies and other policies such as finance, and take targeted measures for some key links in economic operation.

First, in terms of aggregate, we should maintain a proactive fiscal policy and a prudent monetary policy, and provide sufficient support. The active fiscal policy should be moderately strengthened, improve quality and efficiency, make good use of the fiscal policy space, and improve the efficiency of funds and policy effects; Under the current situation, it is necessary to adhere to the orientation that the scale of social financing and the amount of money are slightly higher than the growth rate of nominal GDP, and maintain the financial support for the real economy. At the same time, it is necessary to focus on solving structural blockages and difficult problems, and the active fiscal policy is more inclined to improve people's livelihood and promote consumption, give full play to the traction and driving role of structural monetary policy tools, and guide financial institutions to increase support for small and micro enterprises, green transformation and household consumption.

Second, it is necessary to earnestly promote the increase of capital investment in the whole society. At present, there is no shortage of funds in the market, what is lacking is capital that can take risks. From the logic of bank lending, if the enterprise cannot raise capital, the loan will not go up. At present, it is necessary to put the increase of social capital investment and financing in a more important position, properly handle the relationship between the primary market and the secondary market, study and promote the entry of long-term funds such as insurance funds, pensions, and enterprise annuities into the market, and unblock the financing channels and exit channels of PE VC. In addition, in China's financial system, commercial banks have more financial strength and information advantages. Therefore, it is recommended that large banks with strong capital strength choose one or two provincial branches to invest in hard technology start-ups on a pilot basis in the form of investment-loan linkage, and give flexibility in terms of supervision and assessment.

Third, it is proposed to establish an insurance mechanism for real estate pre-sale funds, allowing real estate enterprises to use a certain proportion of pre-sale supervision account funds in accordance with laws and regulations. At present, the focus of the policy is first to consolidate the main responsibility of real estate enterprises and play a decisive role in the allocation of resources by the market, and then to consolidate the responsibility of the local government and better play the first role. It is necessary to focus on supporting the sustainable and stable operation of most real estate enterprises, especially private head real estate enterprises, and strive to solve their liquidity difficulties, and support real estate enterprises to build good buildings and deliver them to buyers on time and with quality. Suggestion: Establish an insurance mechanism for real estate pre-sale funds, and the Ministry of Finance or the People's Bank of China will withdraw pre-sale insurance at 1% of the balance of pre-sale regulatory funds every year (estimated at about 10 billion yuan per year), and first consider taking it for three years (2024-2026), and withdraw a total of about 30 billion yuan of pre-sale insurance**; Real estate enterprises are allowed to use a certain proportion of the pre-sale supervision account funds in accordance with the corporate governance structure in accordance with the law and compliance, and it is estimated that about 1 trillion yuan of funds can be used immediately by real estate enterprises; If there is an unfinished building in the future, the pre-sale insurance** will pay the compensation in advance with the upper limit of the funds used by the real estate company. This pre-sale fund insurance mechanism can realize the "four or two thousand pounds" capital leverage, to a certain extent, to help real estate companies tide over the difficulties, and strive to transition to existing house sales in three years. At the same time, a special audit will be carried out on the use of pre-sale funds of real estate enterprises to ensure that the pre-sale funds are used in accordance with the law.

Fourth, efforts should be made to promote high-level financial opening-up and ensure the country's financial and economic security. **The Financial Work Conference requires that we should steadily expand the institutional opening up of the financial sector, attract more foreign-funded financial institutions and long-term capital to do business in China, and create a market-oriented, law-based, and international first-class business environment. At present, the proportion of foreign bank assets in China is about 1%, and in terms of the bond market, the proportion of foreign capital holdings is about 3%, and the proportion of foreign capital in the bank and capital market should be promoted to rise steadily. At the same time, it is necessary to actively participate in international financial governance and the formulation of international financial rules, and put forward China's proposals in relevant international cooperation.

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