Article/Jia Kang of China Economic 50 People Forum
The concept of "smart investment" focuses more on the decisive role of market players in the allocation of resources in the "effective market" mechanism, and in combination with the "promising government", in accordance with the requirements of modern national governance, more fully release the potential, stimulate vitality, adapt to and lead the new normal.
How to make "smart investment" under the new normal In economic society, capital is an important factor of production. Capital must be active, mobile and combined with other elements to support economic development. The entrepreneurship and innovation of many enterprises together support China's move from a new era of reform and opening up to a well-off society in an all-round way and docking with the Chinese dream, which naturally requires capital elements. In the process of "building an upgraded version of the economy" under the new normal, capital and investment and financing clearly need to show their bright colors.
I have a thought-provoking suggestion: in the face of the new normal, we should connect the selective "smart investment" mechanism that can increase effective supply according to the new characteristics of the "medium high speed" operation of the economy and the inevitable demands of optimizing the structure, improving the quality of growth, and benefiting people's livelihood.
What we call "smart investment" first aims at some common misconceptions about investment. For example, they thought that simply reducing the proportion of investment in the whole economic life and reducing the growth rate of investment would achieve an "upgraded version". This is not the case!
We must emphasize that the key issue of China's investment is not its total amount and growth rate, but its structure, quality and comprehensive benefits. Smart investment decisions and behaviors based on mechanism optimization have a very important core significance in the present and future.
Such "smart investment" is to release potential, increase effective supply, and help effectively stabilize growth, optimize structure, protect ecology, benefit people's livelihood, and prevent risks on the platform of promoting comprehensive reform. In the face of real economic life, it is particularly necessary to use "problem orientation" to remedy weaknesses, expand prosperity, and increase stamina.
The concept of "smart investment" focuses more on the decisive role of market players in the allocation of resources in the "effective market" mechanism, and in combination with the "promising government", in accordance with the requirements of modern national governance, more fully release the potential, stimulate vitality, adapt to and lead the new normal.
The space corresponding to the decision-making and behavior of "smart investment" can be observed in real economic life. After entering the new normal, there are still a lot of investment objects and investment opportunities. As an effective and promising policy tool of the government, our fiscal and monetary policies have available space to support "smart investment", which is considerable and valuable. It is a pity not to use this space.
For example, the debt of China's public sector has attracted much discussion and attention. In fact, it is now clear that the overall debt ratio of China's public sector was about 40% in 2013, and there is still about 20 points of room for the 60% warning line drawn by the signing of the "Treaty of Malaysia" with the EU. If we use this space in the next few years and gradually increase it by 10 points, it is obviously still within the safe range.
So, what is the bond issuance scale of this public sector to connect with the market? Between 6.5 trillion yuan and more than 7 trillion yuan, the cumulative increase in the size of bond issuance over the years was more than 14 trillion yuan. "Smart investment" means that government departments must use their own funds as "introduction money" to stimulate social funds and private capital, so that private capital can play a more active role and form a joint force. Among them, the government should give necessary policy guidance to support the investment of optimizing the overall structure.
The key issue of China's investment is not the total amount and growth rate, but the structure, quality and comprehensive performance. The policy implication of this core view is to focus on promoting investment and financing innovation. In the innovation of investment and financing, enterprises are the leading role, but what we value more is that we can sum up the experience and lessons learned after more than 30 years of reform and opening up and explore "both enterprises and governments are in place", do what they should do, and can form a joint force to pursue win-win situation.
The entrepreneurial and innovative efforts of all these enterprises and the government should play a better role. To return to a fundamental point, General Secretary Xi's pithy and down-to-earth words - "The people's desire for a better life is our goal", which is a principle that has been pointed out from the humanistic standpoint by the "socialist production purpose".
In combination with real life, I think we can consider how to grasp investment and financing innovation from five perspectives.
The first perspective is indirect financing. The proportion of indirect financing in China is very high, but we also regret to see that there is a lack of vitality of small and medium-sized banks and financial institutions. International experience has repeatedly proved that we have now realized that the development of indirect financing must have a large number of small and medium-sized banks and financial institutions, which can interact with small and medium-sized enterprises.
So, how can we develop it better? We are pleased to see a clear signal that the government is actively considering and promoting the growth of a large number of small and medium-sized banks, including village banks and community banks. In this process of development, other more diversified forms of small and medium-sized financial institutions can also be created.
The second perspective is very important direct financing. In the process of reform and opening up, we firmly promoted the construction and development of the securities market. We can recall that Deng Xiaoping even said at that time: "We must always try. We must try boldly and boldly. If we find it impossible, we will shut it down in a few years.".
The purpose of his words is to let the innovative behavior try first. Is it Deng Xiaoping's original intention to say, "If not, turn it off again"? Obviously not! In fact, he has clearly made the strategic judgment that socialism should also engage in market economy and direct finance and capital market. He said that in the process of reform and innovation, he would start and break the situation in direct financing, and then accumulate experience and promote.
After so many years of development, China's direct financing market still has huge development space and potential, and there is a clearer consensus on increasing the proportion of direct financing. Therefore, we should make the capital market develop more healthily and sustainably. We must give full play to the market and at the same time join the necessary policy guidance, strive to achieve the "slow ox" of the sustainable development of the stock market, and do everything possible to prevent the "crazy ox" of big ups and downs.
The third perspective is financing innovation. Now there are many new things emerging in financing innovation, which deserve special attention and close attention. The business community has noticed that venture capital, venture capital and angel investment, which play an important role in entrepreneurship and high-tech in the Silicon Valley experience, and more and more Internet finance, crowdfunding and other very powerful innovations have emerged.
At the same time, there is also a multi subject supporting industrial fund and government guidance fund. Everyone wants to learn from the experience of Silicon Valley in the United States, but few have succeeded in copying it. Among the high-tech parks with clear positioning given by several countries, Zhongguancun In fact, the underlying logic is to try to build China's Silicon Valley. Other places are also making efforts, such as many regional science and technology innovation parks.
However, China is a laggard catcher in this respect. Europeans who are more advanced than us consider the direction of forming a comparative advantage when learning from Silicon Valley, that is, the government should attract venture capital and venture capital to a relaxed environment, and the government should guide the fund to play a role.
I have noticed that in the process of China's practice, some local governments and departments also hope to be positive and have taken some steps of exploration. Venture capital and venture capital have created a world in Silicon Valley, and thus led the world trend. As a catcher, can we learn from all aspects of the enlightenment and combine the actual situation in China to actively and purposefully play the role of government guidance funds?
This kind of guidance fund can never be taken as a whole, but it should pursue the multiplier effect of financial funds and the role of demonstration and guidance after the limited intervention of the government to support the unconventional development strategy under the condition of risk sharing. Of course, there are many explorations under the concepts of Internet finance and crowdfunding that must be mentioned. Although it is hard to say how far this aspect will go, we have seen many gratifying developments after the connection with the Internet, and even unexpected prosperity in some places.
Technically, I am a layman, but I heard from some friends that China's Internet is now a particularly breakthrough enterprise. The original technology was first used by Americans, who did not have that kind of eye-catching situation after using it. But in China, this effect has emerged. No matter how controversial, at least now we see some specific cases ahead. In this regard, it is obvious that we can be more confident in "introducing, digesting and absorbing, and re innovating".
The fourth point is to emphasize the role of the government. Policy financing is an unavoidable problem. Several years ago, I have repeatedly stressed that in the strategy of "three steps" to realize the Chinese Dream, investment and financing not only rely on commercial finance, but also must have an overall consideration of policy finance. The Third Plenary Session of the 18th CPC Central Committee finally gave a clear signal that policy finance and development finance have been written into the "60 Article" text. In order to achieve the great national rejuvenation of "coming from behind" in China, I think it is absolutely impossible not to have a healthy and sustainable match between policy finance and commercial finance. This should be a basic concept to be established first at the strategic level.
So, In the use of policy tools to support policy financing, of course, it is necessary to continue to use government interest subsidies backed by financial funds, government supported policy based credit guarantees, and the confluence and interaction between such credit guarantees and commercial credit guarantees, in addition to the above-mentioned industrial funds and guidance funds, some government actions.
The Yangtze River Delta has had good experience in this respect: for example, in the past, the financial sector had to spend every year to support small technology enterprises' innovation activities, which was a compulsory part of assessing work performance, but the money spent every year was "pepper noodles", so-called "consumptive", and it was difficult to track performance after going out. In China, a relational society, the distribution process has become a "processing relationship" An irregular state of.
In the Yangtze River Delta, there has been a case where the government took the initiative to put forward that the financial funds should be changed from "consumption" to "recycling". The government invested in the shares in the form of industrial funds, and the shares invested do not require dividends. The financial money has changed from a consumption type to a recycling type, driving private capital to cooperate together.
When shareholders of private capital saw such a situation, they thought that they had reduced the risk prediction, they would enter more actively, and then use financial engineering and professional knowledge to design financial products in connection with the market, to support a group of small technology enterprises that had no hope of financing support with a standardized project selection and decision-making mechanism. Although we cannot (and should not) guarantee the success of every project supported by such policy based finance, it is not in line with the objective requirements of China's modernization strategy not to develop a healthy and sustainable policy and financial system in exploration.
The fifth perspective is very important PPP investment and financing. PPP, which has been repeatedly mentioned by the central government, local governments and relevant departments, and is also hotly discussed by the media, has great potential in China, and we evaluate it as a great innovation of institutional supply. We believe that China needs to strengthen the "smart investment" to increase effective supply. PPP is such a form of financing and investment, and the innovation of this investment and financing model can rise to the height of management model and governance model innovation.
Finally, while seeing development opportunities, we should also face up to a series of new challenges in the new normal phase. When General Secretary Xi talked about the new normal, the fundamental point he emphasized was "innovation driven", "only reform and innovation wins"; He has also repeatedly stressed that "break through the barriers of interest solidification" and "overcome difficulties".
We should hold high the banner of reform in the field of investment and financing, do something to let the market play a decisive role in allocating resources, and create an upgraded version of the economy through the survival of the fittest. At the same time, the "effective government" should play its due role, so that more wisdom, potential and vitality emerge from the private sector, thus forming a new situation in which the investment, financing and financial system serve the upgrading of the real economy. The general direction of investment and financing innovation in such a historical trend is worth our joint efforts.
(The author of this article introduces: Director of the Institute of Financial Science, Ministry of Finance, researcher, doctoral supervisor.)
