Article/Sina Financial Opinion Leader Column (WeChat official account kopleader) 40 person forum
Experts at the meeting proposed that the government and financial institutions have room for improvement to ease the financing difficulties of enterprises, especially small and micro enterprises and private enterprises, but the ultimate direction should be to solve the problem of capital supply and price in a market-oriented way.
Perhaps in the winter of 2018, Chinese private enterprises will bid farewell to the cold winter of development.
The biggest positive came from a rare high-level meeting. On November 1, Xi Jinping, General Secretary of the Central Committee of the Communist Party of China and President of the People's Republic of China, presided over a forum for private enterprises, including three members of the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China, one party, two sessions and top leaders of major financial institutions. This was the first time in six years that such a high-level forum for private enterprises was held in China.
Such a high degree of attention shows the thorny problems encountered in the development of private enterprises. For private enterprises, this meeting is nothing less than a reassurance.
In the past half month, local governments, financial systems, financial systems, and judicial systems have all met in succession and issued relevant policies and rules to help private enterprises tide over difficulties. On November 9, Premier Li Keqiang again requested at the executive meeting of the State Council to increase financial support to ease the difficulty and high cost of financing of private enterprises, especially small and micro enterprises; Decide to carry out special actions to solve the problem of arrears in the accounts of private enterprises; Deploy and effectively play the role of government financing guarantee to support the development of small and micro enterprises and "agriculture, rural areas and farmers".
Various rescue policies have been introduced, but the key is still to implement, and the key to implement is to find out what problems exist in the process of docking between financial institutions and enterprises. In order to promote in-depth communication between the two sides and find the path and method to solve the problem, on November 10, the North New Financial Institute (NFI) under the China Financial Forty Forum (CF40) held the first phase of a series of exchanges on "financial support for the real economy" in Tianjin, with the theme of "diversified financial supply to help the transformation and upgrading of the real economy", The meeting was presided over by Cai Esheng, president of the North New Financial Research Institute and former vice chairman of the China Banking Regulatory Commission. At this meeting, representatives of financial institutions and enterprises had a full dialogue, and also talked about the current puzzles and problems they face.
▲ The first phase of the "financial support for the real economy" series of exchanges
▲ Cai Esheng, President of North New Financial Research Institute and former Vice Chairman of CBRC How did this round of private enterprise crisis break out?
This round of crisis of private enterprises began with the default of the bond market this year. Unlike the state-owned enterprises and the "one high and two surplus" industry, the main default objects in 2014-2015 are mostly private listed companies, especially those that rely on equity pledge, bond issuance and non-standard rolling financing to expand significantly.
From the perspective of the causes of default, the macro regulatory environment has become stricter. With the implementation of a series of policies such as new asset management regulations, the access to off balance sheet financing has been greatly tightened. At this time, some enterprises that blindly expanded and leveraged in the early stage are more likely to encounter liquidity crisis, and risks have also been exposed.
Unlike in the past, most bond default events this time are closely related to the capital market. Since this year, China's stock market has continued to decline. The superposition of the two has brought great risks. The most prominent risk is that some listed private enterprises face the risk of equity pledge positions.
Especially since October, the decline of US stocks has triggered sharp fluctuations in the A-share market. On October 11 and 18, A-share experienced two rounds of decline, and the Shanghai Composite Index fell below 2500 points. The decline of stocks directly caused the equity pledge of listed companies to be closed. According to incomplete statistics from relevant institutions, at least 45 A-share listed companies' pledged shares have been forcibly closed this year.
The problem behind the equity pledge is that it is difficult and expensive for private enterprises to finance. In fact, in order to support private enterprises, small and micro enterprises, since this year, the People's Bank of China has implemented four targeted RRR reductions, lowered the deposit reserve ratio by 250 basis points, net invested 2.3 trillion yuan of liquidity, and provided 300 billion yuan of liquidity support through refinancing and rediscount. But the problem is that the transmission mechanism of monetary policy is not smooth, and the released liquidity has not really been transmitted to the real economy.
In addition, the central bank data shows that the off balance sheet financing in the first three quarters of this year decreased by 5 trillion yuan compared with the same period last year; The increase of loans and direct financing is only 2 trillion yuan, and the gap between the two reflects the huge gap of market funds.
Against the background of credit contraction brought about by deleveraging and strong supervision, the stock market continued to fall. In addition to various blind expansion problems accumulated by private enterprises in previous years, various risks finally broke out in October.
Policy path to help private enterprises extricate themselves from difficulties
The central government pays close attention to the crisis of private enterprises and has issued various policies.
In September, the Central Bank held two symposiums to understand the financing situation of private enterprises, small and medium-sized micro enterprises. On October 19, in order to stabilize the sentiment of the stock market, Vice Premier Liu He of the State Council, President Yi Gang of the People's Bank of China, Chairman Guo Shuqing of the Banking and Insurance Regulatory Commission, and Chairman Liu Shiyu of the Securities Regulatory Commission were interviewed respectively, and proposed solutions to the current problems faced by private enterprises from different aspects. Subsequently, various measures were introduced from the Central Bank to the CBRC and the CSRC.
From the Financial Stability Meeting on October 21 to the Political Bureau meeting on October 31, the key issues point to the development difficulties of private enterprises.
The highest standard meeting was held on November 1. At the private enterprise forum, Xi Jinping stressed three "unchanged" points. "Any words and deeds that negate, doubt, or shake China's basic economic system do not conform to the Party's and the country's principles and policies, do not listen to or believe!" Such expressions gave the market, especially private enterprises, a "reassurance".
Yi Gang and Guo Shuqing talked about the specific ideas to solve the problem of difficult and expensive financing of private enterprises when they were interviewed by the media on November 6 and 7, respectively. Yi Gang proposed the policy combination of "three arrows": increasing the credit of private enterprises, supporting private enterprises to issue bonds, and establishing private enterprises' equity financing support tools. In terms of increasing credit, Guo Shuqing proposed the "One Two Five Year" goal of large banks' loans to private enterprises.
On November 8, bank shares fell, partly because the market feared that the above policy objectives would increase the scale of non-performing loans of banks. But in fact, the market ignored the context of the "One Two Five Year Plan" goal. The supervisor stressed that the "One Two Five Year Plan" goal is not a rigid assessment goal, and every bank will not be required to meet it; It is also emphasized that the setting of this goal is feasible after careful demonstration and calculation. It will not have a significant impact on the non-performing loans of banks.
At the executive meeting of the State Council held on November 9, four measures were put forward to increase financial support for private enterprises, and efforts were made to reduce the average loan interest rate of small and micro enterprises newly issued by financial institutions in the fourth quarter by 1 percentage point compared with the first quarter.
It can be seen from several meetings that the goal and path of the policy are gradually clear, and the financing environment of private enterprises may usher in unprecedented improvement.
Difficulties in the specific implementation process
No matter how well the policies are formulated, they often encounter problems of one kind or another at the grass-roots level.
At the first series of exchange meetings on "financial support for the real economy" held by NFI on November 10, representatives of financial institutions and private enterprises participating in the forum, based on their existing experience, talked about some problems still existing in the current relief of private enterprises' financing difficulties.
First, how to ensure the sustainability of financial institutions' loans to small and micro enterprises. For private enterprises, especially small and medium-sized micro enterprises, due to their low financing lines and great difficulty in due diligence, the loan income of financial institutions often cannot cover the cost of capital. Take a large state-owned bank as an example. Under the tax exemption, the total cost of a one-year loan of 5 million yuan to small and micro enterprises (including all operating costs, risk costs, and economic capital costs) is almost the same as the loan income. For those small and medium-sized banks that cannot obtain the support of the central bank and enjoy preferential policy interest rates, the loan cost is high and the risk is high.
Second, there is a lack of third-party professional institutions to price the entire credit status of small and micro enterprises and private enterprises. Due to the high risk of small and micro enterprises, the cost of risk assessment is also high. From the fund provider (bank) to the fund demander (SMEs), there is a problem of risk assessment, rating and pricing. However, there is a lack of such third-party assessment institutions in the current market.
Third, at present, there is a huge gap in the financing market from bond investment with low risk level to VC and PE investment with high risk level, and the market lacks financing tools with different risk levels that match the enterprises at all levels with inferior priority. In China, indirect financing is the main form. The financing instruments in the financial market are not perfect, and the multi-level capital market has not been effectively established. There is no way for enterprises to finance, and they can only turn to bank credit. Therefore, it is necessary to establish a multi-level capital market so that enterprises with different ratings can find financing tools that are relative to their risk levels.
Fourth, in the specific implementation, we should make a scientific and objective analysis of the problem of "difficult and expensive financing". For example, to reasonably distinguish the difficulty of enterprise financing, we should not only judge by the standards of state-owned/non-state-owned enterprises, large, medium-sized, small and micro enterprises, but also further distinguish the different impacts of enterprises' capital, net assets, asset liability ratio, leverage ratio on the availability of their financing needs.
Finally, we should resolve the dilemma of private enterprises in a market-oriented way
At this NFI meeting, the experts at the meeting proposed that the government and financial institutions have room for improvement to ease the financing difficulties of enterprises, especially small and micro enterprises and private enterprises, but the ultimate direction should be to solve the problem of capital supply and price in a market-oriented way.
For financial institutions, first of all, they should improve their awareness of inclusive finance to serve small and micro enterprises and private enterprises. Second, we need to do a good job in the internal assessment and incentive mechanism. We can also optimize the financial service incentive and constraint mechanism for small and micro enterprises from the aspect of due diligence exemption, and establish a "negative list" of due diligence exemption. Third, we should expand the supply of financial products through technological innovation and enrich the channels and toolboxes for banks to serve small and micro enterprises. At the same time, technological innovation can also better control risks, achieve accurate delivery, and pay more attention to long tail customers, which is conducive to shortening the financing cycle and reducing financing costs.
For government departments, experts pointed out that coordination between different policies should be strengthened first. At present, although there are many support policies issued by various departments, the process of releasing policy dividends is slow. The implementation effect of the policy has not reached the expectation.
Second, the boundary between government and finance should be set, and it should be clear that various relief measures for private enterprises should follow the market-oriented path. The report of the 19th National Congress of the Communist Party of China made it clear that the market should play a decisive role in resource allocation, and at the same time, it was required to deepen the market-oriented reform of interest rates and exchange rates. Therefore, the market should play a more important role in the issue of capital supply and price, and the fundamental way to solve the problem of private enterprises, small and micro enterprises' difficult and expensive financing is to rely on the market.
Third, it should be clear whether the current dilemma is a short-term or cyclical problem or a long-term problem, which directly determines whether the government's rescue means is a short-term emergency measure or a long-term institutional change. If short-term means are used to deal with long-term problems, they will end up fruitless; If long-term means are used for cyclical problems, new risks may emerge after the cycle.
(The author of this article introduces that the China Finance 40 Forum (CF40) is an unofficial and non-profit professional think tank, which is positioned as a new type of "platform+entity" think tank and focuses on policy research in the economic and financial fields.)
