In the history of financial development in the past 100 years, many countries have had an adjustment process of deleveraging after the economy is highly leveraged
Deflationary deleveraging.
It is the financial austerity, which has caused an extremely serious economic depression and business closures, financial bad debts, and economic collapse.
Severe inflation deleveraging.
It is crazy to add money printing money, dilute all kinds of bad debts through the issuance of currency, and if inflation is too serious, it will appear in society, leading to a violent economic crisis, causing the national economy to rise and fall.
Benign deleveraging.
That is, the economy has been suppressed to a certain extent, but it is still healthy upward, and the adjustment of the industrial structure and enterprise structure has been improving, which has not only reduced the high macroeconomic leverage, but also avoided the depression of the national economy, maintained economic stability, and has not seen a serious crisis.
For the above three situations, Professor Huang also gave examples:
The first is to take Japan as an example, from the late 80s of the 20th century to the present, it has been deleveraging, because in the 80s, the rise in the yen exchange rate led to the rapid expansion of Japan's acquisition of American assets, and the economy collapsed in the 80s, and the entire national economy was stagnant for nearly 20 years, that is, the "lost 20 years".
There are too many examples of the second type, too many countries in the world are crazy to borrow during the boom period, and when they encounter a crisis, they are crazy to print money, resulting in a country's economic collapse or even bankruptcy.
Third, taking the United States as an example, in the decade after the subprime mortgage crisis in 2008, on the one hand, the bad debts of collapsed financial companies were written off; On the other hand, through the easing process of Q1, Q2 and Q3, the Dow Jones index has risen from 6,000 points to 28,000 points, and the entire corporate debt ratio is now very low (the previous data mentioned that the debt of US companies is 60% of GDP).
So for the domestic situation, how to achieve macroeconomic deleveraging?
Professor Huang mentioned (2018): From a macro perspective on this structure and model, if our country wants to reduce the macro debt of the national economy by 250% of GDP by 350 points, what part will it be reduced? I think that in the next five to ten years, if the debts of residents and ** can be controlled steadily at about 50%, it will be a good luck, and the key is to reduce the 160% of enterprises by 40 points to 120%. It would be great if businesses could really get down to 120%, * 50%, 50% of residents, and 220% combined.
First of all, we must have a macroeconomic deleveraging goal, and we must not allow the current leverage ratio of 250% to become 300% in five or ten years.
On the macro level, deleveraging must be lower than the current 250%, such as three or five years later. Ten years later, through supply-side structural reform, we will strive to control the leverage ratio at about 200%, which is a quantitative and qualitative macro goal, and we must unswervingly strive to achieve it.
Looking back at the data on China's debt leverage structure in 2023 provided in our previous article: **Debt 559%, resident debt 635%, corporate debt 1684%, which is indeed not as balanced as Professor Huang expected to drop to 220% in five years, but has been ** to 287% in more than five years
The situation is getting worse and worse.
For the most serious corporate debt problem in China, Professor Huang also proposed five ways to deleverage:
Write-off bankruptcy. For enterprises, it is equivalent to defaulting on debts, forcing bankruptcy, and removing bank debts.
Mergers and acquisitions, optimal allocation of resources. For example, around 2000, state-owned enterprises were reformed, debts were swapped into equity, debts were stripped, and enterprise restructuring was carried out. This reform led to the formation of four trillion-yuan asset management companies in the following decade.
Adjust the new financing structure. Equity financing continues to grow to nearly 50% of the new financing each year.
Benign inflation, autonomously diluting a part of the debt.
Stabilize and appropriately reduce the growth rate of m2. This is also an important aspect of reducing corporate leverage. Avoid creating an ecological environment in which corporate debt is excessively loose.
Professor Huang mentioned that among the above five methods, the most critical measure is the third one, that is, the transformation of China's investment and financing system, the core of which is to do a good job in the delisting system. Taking the United States as an example, from the 80s of the 20th century to the present, even if the market value of ** has quadrupled, the number of enterprises is generally unchanged, basically advancing and retreating 1 1. The market capitalization and GDP of the United States are roughly 1 1. Therefore, ** represents a weather vane of the national economy.
According to Professor Huang's estimates, in the next 3-5 years, the proportion of total corporate debt to GDP will drop by 1-20%, and in 5-10 years, it will drop by 3-40%. The first bankruptcy law can dedebt more than 6 trillion yuan; The second restructuring law can exempt more than 6 trillion yuan; the third is through the development of equity financing, which can reduce debt by more than 30 trillion yuan; The fourth type of benign inflation can dilute 10 trillion yuan, and in general, these methods may add up to 50 trillion yuan.
But it backfired.
There is a problem in our country now, and it has not done a good job. Most of the public offerings are debt investments, and the private offerings are real debts, and there is a lack of real equity investment.
Taking the public offering as an example, as far as Lao Wang knows, even the China Securities Regulatory Commission has carried out proportional distribution when actually guiding the company to issue products:The issuance of bonds must be matched with ***
Up to now, the scale of public offering **27 trillion**, currency** accounts for 47%, bonds** account for 22%, and *account for only 11%.