Chinanews.com Client, Beijing, March 22th. Recently, the epidemic of new crown pneumonia has spread globally, and international financial markets have fluctuated significantly, causing great concern. Will the epidemic cause a global financial crisis? What impact will it have on China's economy, financial markets, and financial institutions?
On the 22nd, the State Council Information Office held a press conference to introduce the response to the impact of the international epidemic, maintain financial market stability, and answer social concerns.
The site of the press conference held by the State Council Information Office on March 22.
It is too early to conclude that the world has entered the financial crisis
Chen Yulu, Vice President of the People's Bank of China:
Recently, the spread of the international epidemic has affected the turmoil in the international financial markets. Stock markets in Europe, America, and many emerging market economies have fallen on average by about 30%. It is too early to conclude that the world has entered a financial crisis.
The international financial crisis usually has three basic characteristics: First, whether there is a continuous panic decline in the international financial market across markets. The second is whether a large number of financial institutions have failed, especially systemically important financial institutions. The third is to see if the operation of the global real economy has been seriously damaged.
At present, in response to the intensification of international financial market turbulence, many countries have successively introduced some countermeasures. The effects of these measures have yet to be observed.
China's financial market has withstood the test, and its operation is generally stable
Chen Yulu, Vice President of the People's Bank of China:
Judging from the actual situation, after the turbulence of the international financial market, China's financial market has withstood the test, showing a high degree of stability and a small fluctuation range. At present, China's financial market is generally stable and the market is expected to be relatively stable. The space for macro policies and the reserve of tools are sufficient. The operation of China's financial system is generally stable, the financial market is expected to be stable, and the currency and credit are growing steadily and rapidly. The national economy has withstood the epidemic, and it has also contributed significantly to the stability of the global economy and finance.
Li Chao, Vice Chairman of China Securities Regulatory Commission:
The situation of domestic epidemic prevention and control continues to improve, and the resumption of work and production and the restoration of production and life have shown a very good momentum. These have played a decisive role in improving market expectations. Compared with overseas markets, China's financial market is generally relatively stable. The A-share market has shown relatively strong resilience and anti-risk capabilities. The A-share market has relatively small fluctuations and investors' behavior is more rational. The total amount of leveraged funds in the current stock market has decreased by 80% compared with the peak in 2015, and the number of high-pledged listed companies has decreased by 1/3 during the peak period.
Data map: People's Bank of China. Photo by Zhang Xinlong of China News Agency
International financial market turmoil will not affect China's banking and insurance industry
Zhou Liang, Vice Chairman of China Banking Regulatory Commission:
The turbulence in the international financial market and the downward pressure on the domestic economy do exist. Our judgment is that this will definitely have a certain impact on China's banking and insurance industry, but in general, the impact will not be too great. From the actual situation, the current overall operation of the banking and insurance industry is very stable, and there is no sign that the risk has suddenly erupted. With the further improvement of the domestic epidemic prevention and control situation, the banking and insurance industry will continue to maintain a good momentum of healthy and stable development.
Judging from the data, the nationwide macro leverage ratio has remained basically stable, and financial risks have also shifted from the original divergent state to convergence. In the past three years, the total non-performing loans handled by the banking industry reached 5.8 trillion yuan, and high-risk businesses such as shadow banking and cross-financing have dropped 16 trillion yuan. A number of problematic financial institutions have been dealt with in an orderly manner.
The external environment will not change the stability of the Chinese capital market
Li Chao, Vice Chairman of China Securities Regulatory Commission:
Judging from the investigation of our listed companies, the return rate has exceeded 98%, which is higher than the national average. Liquidity is reasonable and abundant, and the valuation level of the stock market is at a historically low level. Generally speaking, the impact of the external environment is phased and will not change the trend of the stability and improvement of China's capital market.
The recent outflow of foreign capital is not a subversive and fundamental impact on A shares
Li Chao, Vice Chairman of China Securities Regulatory Commission:
From the beginning of this year to the present, in fact, the net outflow of foreign capital from the A-share market is about 20 billion yuan. In the past, especially in 2019, foreign capital entering the A-share market was relatively concentrated and the amount was relatively large. Comparing the data of the past month with the previous one, the contrast may appear larger. But in fact, the size of this net outflow is not large, and the proportion of foreign capital in the current market value of the A-share market is less than 4%, and the proportion of transactions is not very large. Therefore, the flow of foreign capital has disturbed the A-share market, but it is not a subversive and fundamental shock.
Data chart: Shareholders of a securities trading hall pay attention to the market trend.
Appropriately relax the 30% limit on equity investment in insurance companies
Zhou Liang, Vice Chairman of China Banking Regulatory Commission:
Insurance companies have now become the second largest long-term institutional investor in China's capital market. At present, the balance of our insurance funds has reached 18.8 trillion yuan, and the size of investment stocks and funds has reached about 2 trillion yuan, accounting for insurance funds. Use the balance of 10.8%. Next, for insurance companies with higher solvency adequacy ratios and better asset matching conditions, allowing them to appropriately increase the proportion of equity assets based on the 30% ceiling of existing equity investments.
Capital market reforms will not be affected by the epidemic
Li Chao, Vice Chairman of China Securities Regulatory Commission:
The reform and opening up of the capital market will not be affected by the epidemic. Regarding the GEM reform, serious research and demonstration have been done at a certain stage, including soliciting opinions within a certain range. The GEM reform will focus on the main line of the registration system, and will make reform arrangements in other aspects, including a series of basic systems such as issuance, listing, information disclosure, trading, and delisting. At present, related work is progressing in an orderly manner.
Data map: Bank staff showed 100 yuan. Photo by Zhang Yun
The future exchange rate of RMB against USD is expected to fluctuate around 1: 7
Chen Yulu, Vice President of the People's Bank of China:
Recently affected by the international epidemic, there have been relatively large fluctuations in the international foreign exchange market. Although the RMB exchange rate has also fluctuated, it has remained basically stable at a reasonable and balanced level. In general, the exchange rate of RMB against the US dollar is expected to fluctuate around 1: 7 in the future, with depreciation and appreciation, and will continue to float in both directions. The foreign exchange market will run smoothly and the exchange rate is expected to be stable.
Xuan Changneng, Deputy Director of the State Administration of Foreign Exchange:
In the medium and long term, China's economic fundamentals, currency and financial conditions will become a strong support for stabilizing China's cross-border capital flow, and the RMB exchange rate will fluctuate in both directions within a reasonable range, and there is no basis for substantial depreciation.
Will monetary easing be more vigorous?
Chen Yulu, Vice President of the People's Bank of China:
In the next stage, we will grasp the intensity, rhythm and focus of monetary policy in stages, and always maintain a reasonable and adequate liquidity, especially to achieve the basic matching of M2 and social financing scale growth with nominal GDP growth rate, which can be slightly higher. Increasing support for small and medium-sized banks to supplement their capital and issue financial bonds is to further enhance the overall willingness and ability of commercial banks to provide credit. Continue to promote the reform of the quoted interest rate (LPR) in the loan market to guide the continuous decline in the real interest rate of loans. (Finishing: Shangguan Yun Zhang Xulang Lang Zuo Yukun Ren Siyu Cheng Chunyu) (End)