Source: Guoshi Express
Author: Qiu Muzi

The Central Financial Work Conference was held in Beijing from October 30 to 31. The Central Financial Work Conference was held in Beijing

This is the first time that a national financial work conference has been held again after a lapse of 6 years since the 2017 National Financial Work Conference was held. It is also the first time that the Central Financial Work Conference has been held. The conference analyzed the situation facing high-quality financial development and deployed current and future financial work.

What are the priorities of financial work proposed at this conference? The China News Agency directly interviewed a number of chief economists to provide interpretations.

Lian Ping: Highlighting the Party Central Committee's centralized and unified leadership of financial work

Lian Ping, Chairman of the China Chief Economist Forum and Vice President of the Shanghai Economic AssociationHe said that this conference proposed for the first time that it is necessary to improve the institutional mechanism for the Party to lead financial work, give full play to the role of the Central Financial Commission, and do a good job of overall coordination and control. Give full play to the role of the Central Financial Working Committee and effectively strengthen party building in the financial system. Give full play to the role of local party committees, financial committees, and financial working committees, and implement territorial responsibilities.

He said that according to the Party and State institutional reform plan for March this year, in order to strengthen the centralized unified leadership of the Party Central Committee over financial work,The first is the establishment of the Central Financial Commission.Strengthen the centralized and unified leadership of the Party Central Committee over financial work, be responsible for top-level design, coordination, overall promotion, and implementation of financial stability and development, and study and review of major policies and major issues in the financial sector.The second is the establishment of the Central Financial Services Commission.Unify the work of the Party in the financial system and guide the Party in the financial system in its political construction, ideological construction, organizational construction, style of work, discipline, etc.

This conference is also the first central financial work conference held since the establishment of the Central Financial Services Commission and the Central Financial Services Commission, highlighting the centralized unified leadership of the Party Central Committee over financial work.

Cheng Shi: Strong financial support for the economy is inseparable from its steady development

Cheng Shi, ICBC International Chief EconomistWe believe that the central financial conference held at the end of October 2023 is forward-looking, original and clear in its guidelines, and has played an important role in helping finance clarify its position, achieve fundamental functions, clarify development ideas, identify the way forward, exert positive performance, make up for shortcomings in risks, enrich the dimensions of innovation, enhance competitive strength, and boost market confidence.

He mentioned that compared with the previous five National Financial Work Conferences, the macro background of the Central Financial Conference held this time was more complex, sensitive, and special. Seen from the outside, the global economy is in a rare “stagflation” pattern. Major changes and geopolitical turmoil that have not occurred in 100 years are also slowly unfolding in a way that exceeds expectations, and external uncertainty has accumulated widely; from an internal perspective, China's economy has reached a critical stage of reform and opening-up, and financial support for the high-quality development of the real economy urgently needs to consolidate the foundation and forge ahead.

Cheng Shi believes that in a new situation where challenges and opportunities coexist, this conference emphasized that “finance is the lifeblood of the national economy and an important part of the country's core competitiveness,” and that the return of finance to its roots, reform and innovation, and opening up to the outside world are important supports to support the high quality of the real economy. Striking an iron requires even greater self-strength. Strong financial support for the economy is inseparable from the steady development of finance itself.

Liu Jing: Laying the Foundation for Agile and Efficient Financial Supervision in the Future

Liu Jing, Chief Economist for Greater China at HSBC Global ResearchHe said that the transformation of the economic structure and the constant rise of financial innovation have affected the efficiency of financial resource allocation to a certain extent, causing the problem of capital removal from reality to falsification and regulatory arbitrage.

The 5th National Financial Work Conference introduced “new asset management regulations” to reduce the scale of shadow banking, and steady progress has been made in preventing and mitigating risks in the financial system.

This conference lays the foundation for future agile and efficient financial supervision, making the development of the financial industry more in line with the transformation needs of the real economy and promoting the healthy development of the entire financial system.

Pang Ming: Monetary policy maintains targeted strength, precision, and continuous strength

Pang Ming, Chief Economist and Director of Research at JLL Greater ChinaIt was mentioned that with regard to monetary policy, the conference pointed out that it is necessary to maintain the prudence of monetary policy at all times, pay more attention to cross-cyclical and countercyclical adjustments, and enrich the monetary policy toolbox.

He believes that in terms of prudent monetary policy, there is still room for moderate easing and reasonable growth in the amount of money and the total amount of social financing, there is still room for comprehensive corporate financing costs and personal consumer credit costs to decline steadily, and there is room for structural, policy, and development financial development tools to step up services for high-quality development.

It is expected that monetary policy will continue its steady trend, maintain strong and moderate monetary conditions, effectively maintain reasonable and abundant liquidity, grasp the pace of credit investment more flexibly, optimize and adjust credit investment and credit structure, rationally allocate credit resources, and maintain targeted, precise, and continuous strength.

Clear: The main development direction of real estate finance is clear

Ming Ming, chief economist of CITIC SecuritiesThe conference mentioned the establishment of macroprudential management of real estate finance. Since August, with the implementation of a series of real estate properties, the real estate market has gradually recovered. In the future, the construction of the three major projects that are rigid, improved, and guaranteed will become the main development direction of real estate finance.

Furthermore, monetary policy should maintain reasonable and abundant liquidity and create reasonable monetary conditions for economic and social development. Considering the recent large-scale issuance of government bonds and some pressure on market capital, it is expected that the central bank will continue to provide liquidity to the market through downgrading and MLF renewal. At the same time, the conference mentioned that with cross-cyclical and countercyclical adjustments, the current economic recovery is still not reliable. The PMI announced today is once again below 50, which means that the central bank will still need to adopt aggregate volume and structural tools to support the recovery of the real economy in the future.

Ming also said that the exchange rate of the RMB against the US dollar has been under pressure recently due to rising pressure from overseas US dollars. However, it should be seen that the exchange rate of the yuan remains stable against the basket. In the future, as the domestic economy gradually stabilizes and recovers, and in line with the implementation of various management policies in the foreign exchange market, the RMB is expected to stabilize.

Wen Bin: Focus on promoting a high level of financial openness

Wen Bin, Chief Economist of China Minsheng BankHe said that the Central Financial Work Conference pointed out that efforts should be made to promote a high level of financial openness, ensure the country's financial and economic security, and steadily expand the institutional opening up of the financial sector. This not only echoes the “steady expansion of systemic opening up of rules, regulations, management, standards, etc.” proposed by the Twenty National Congress Report, but also places higher demands on the next stage of financial opening up.

This aspect requires speeding up the integration of regulatory rules with the international community, establishing a fair, transparent, and standardized market system, and creating a market-based, rule-of-law, and international first-class business environment. On the other hand, while promoting financial openness, it is also necessary to effectively maintain financial security and stability, enhance risk prevention, control and mitigation capabilities, and ensure that financial management capabilities match the level of openness.

Editor/jayden