(Economic Observation) The Financial Commission made its first voice in 2021. Why is it paying special attention to commodity prices?
China News Service, Beijing, April 9th (Reporter Xia Bin) The Financial Stability and Development Committee of the State Council (hereinafter referred to as the "Financial Commission") held its fiftieth meeting on April 8.
This is the first time that the Financial Commission has made public public announcements since 2021.
The meeting once again emphasized the policy tone and policy orientation set by the government in the past period of time, and also put forward new hotspots of concern in light of the latest situation.
"It is necessary to maintain the basic stability of prices, especially pay attention to the price trend of bulk commodities." The Financial Committee emphasized so.
The latest data released today show that in March 2021, the national factory prices of industrial producers rose 4.4% year-on-year and 1.6% month-on-month.
Dong Lijuan, a senior statistician at the City Department of the National Bureau of Statistics of China, said that from a month-on-month perspective, the PPI (Ex-factory Price Index of Industrial Producers) rose by 1.6%, an increase of 0.8 percentage points from the previous month, due to factors such as rising international commodity prices.
In fact, international crude oil prices have continued to rise recently, which has driven the price increase of domestic petroleum-related industries to expand;
Affected by the increase in the price of imported iron ore, the increase in domestic industrial production and investment demand, the prices of ferrous metal smelting and rolling processing industries have risen; the prices of non-ferrous metals such as copper and aluminum in the international market have also risen more.
The Citigroup research team believes that in the rest of 2021, commodity prices should rebound strongly, including oil, copper, and corn.
The relevant person in charge of China's National Development and Reform Commission previously stated that global liquidity and rising international commodity prices may be transmitted to the country through trade, finance and other channels, but the impact of such transmission is generally limited and controllable.
Xu Qiyuan, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences and director of the Economic Development Research Office, analyzed that in 2020, the global launch of a large-scale economic stimulus plan due to the epidemic has led to a significant increase in commodity market prices.
He said that China has slowly adjusted its policies since the macroeconomic stabilization in the third quarter of last year, and it is expected that the global economic stimulus plan may also end within the next year.
In addition, as the US vaccination rate rises and the European and American economies will return to normalization, commodity prices will gradually return to fundamentals.
Looking at the contents of the financial committee meetings announced, more than half of the pages focus on local financial institutions.
The meeting affirmed the role of local financial institutions, but also pointed out that some local financial institutions have exposed risks, and internal governance and external supervision need to be improved, requiring great attention.
"This means that the Financial Commission has set the tone and will start to solve the problems of local financial institutions from both internal and external efforts in the future." Tian Lihui, Dean of the Institute of Financial Development of Nankai University, told a reporter from China News Agency that governance should be within the company. "Surgery", supervision is to exert pressure from the outside.
Zeng Gang, deputy director of the National Finance and Development Laboratory, also pointed out that from a policy-oriented perspective, the core of small and medium-sized banks is to support the development of the local economy. If the asset-side business breaks through the geographical restrictions, it is not conducive to supporting the local real economy, and capital outflows will also increase. The development of large county areas is uneven.
He further stated that in practice, although some small and medium-sized banks have increased their scale by using the Internet to absorb reserves, the hidden risks have also been gradually enlarged.
"The motivation for small and medium banks to open deposits in other places and break through regional operations is their yearning for scale. After breaking through geographical restrictions, the bank's deposit and loan market is very easy to grow, but there is also a certain liquidity risk."
City commercial banks, rural financial institutions, financial leasing companies, regional equity markets, small loan companies, and various local trading venues all belong to the category of local financial institutions. They are large in number and widely distributed, and risk management is not easy.
In order to promote the effectiveness of the micro-governance mechanism and the improvement of the regional financial ecology, the Financial Committee meeting proposed four measures, including grasping positioning and optimizing structure; strengthening supervision and improving quality and efficiency; improving governance and standardizing operations; improving the rule of law and enhancing vitality.
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