(Economic Observation) What signals of China's economy will be revealed by many ministries and commissions?
China News Service, Beijing, September 5th, title: What signals of the Chinese economy are revealed by the Service Trade Council of many ministries and commissions?
China News Agency reporter Wang Enbo
The 2021 Service Trade Fair, one of China's three major exhibition platforms opening to the outside world, is being held in Beijing.
During the period, a number of high-level ministries and commissions spoke intensively, revealing the next economic development policy signals.
Promote the systematic and institutional opening of the financial industry
In recent years, China has insisted on expanding the opening up of its financial industry in an independent and orderly manner, and many international investors have participated in it.
Chen Yulu, deputy governor of the People's Bank of China, revealed that in the first half of this year, foreign investors increased their holdings of domestic renminbi assets including stocks, bonds, deposits and loans totaling RMB 1.27 trillion, demonstrating the huge appeal of China's financial market.
He said that China will continue to adhere to the principles of marketization, legalization, and internationalization, continue to deepen the opening up of the financial industry, grasp the implementation of financial industry opening commitments on the one hand, and accelerate the improvement of various institutional arrangements on the other hand to promote systematic and institutional opening up.
Including improving the pre-access national treatment plus negative list management system; optimizing regulatory policies to create a good business environment; continuously improving economic and financial management capabilities and risk prevention and control under open conditions.
Pay attention to the sequelae of unlimited quantitative easing
Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission, issued a warning: There are various signs that the implementation of unlimited quantitative easing policies in major developed economies distorts capital prices, aggravates resource misallocation, encourages market speculation and de-realization, and is likely to leave serious sequelae.
He bluntly said that although unconventional stimulus policies have a temporary effect on alleviating the crisis in the short term, it is difficult to solve deep-seated structural problems.
"As the saying goes, when the tide rises and the boat rises, there will be a clear end." Zhou Liang believes that as the macroeconomic policies of major developed economies turn to expectations, some countries are facing multiple pressures such as capital outflows, currency devaluation, and increased inflation, and financial vulnerabilities have risen.
Under the current situation, all countries in the world should strengthen coordination and cooperation, jointly maintain the stability of the international market, and promote the healthy and sustainable recovery of the global economy.
The capital market strictly guards against large capital inflows and outflows
China's capital market opening to the outside world has attracted much attention, but the open environment also puts forward requirements for supervision and risk prevention capabilities.
Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said that we must adhere to the requirements of liberalization, visibility and control, strengthen the monitoring, analysis and judgment of cross-border investment behavior and capital flows in the capital market, and maintain the smooth operation of the capital market. Prevent the risk of large capital inflows and outflows.
He analyzed that with the adjustment of international monetary policy, it is normal for some foreign capital to make some adjustments in asset allocation and will not cause large inflows and outflows.
However, it is also necessary to prevent individual foreign-funded institutions from maliciously entering and exiting through investment activities to drive changes in the entire market.
It is necessary to deepen cross-border supervision cooperation, properly solve the problems encountered in supervision cooperation, effectively maintain the normal order of cross-border investment and financing activities, and create a predictable regulatory and institutional environment.
Promote the opening of capital projects in a steady and orderly manner
The capital account is open to a high level, and China is now proceeding steadily and orderly.
Zheng Wei, deputy director of the State Administration of Foreign Exchange of China, for example, this year, the foreign exchange bureau continued to simplify the qualified foreign institutional investors (QFII) and renminbi qualified foreign institutional investors (RQFII) on the basis of the removal of quota restrictions.
Improve the normalized issuance mechanism of qualified domestic institutional investors (QDII) quotas. In the first half of this year, US$30.6 billion QDII quotas were issued to 50 institutions.
Zheng Wei said that in the next step, the SAFE will advance capital account opening in a steady and orderly manner, promote cross-border investment pilots for equity investment funds, improve foreign direct investment management, and do a good job of piloting multinational companies' integrated domestic and foreign currency fund pools.
Promote the implementation of the negative list of cross-border service trade
According to Wang Bingnan, Vice Minister of China’s Ministry of Commerce, according to UNCTAD’s calculations, the scale of China’s digitally delivered service trade reached 294.76 billion U.S. dollars in 2020, which bucked the trend and increased by 8.3% during the new crown pneumonia epidemic, accounting for 44.5% of the total service trade. This is an increase of 13.9 percentage points over the initial period of the "Thirteenth Five-Year Plan" period.
Digital trade has played an important role in reducing the overall service trade deficit and enhancing the competitiveness of China's service trade.
Talking about the next step, Wang Bingnan mentioned that it is necessary to promote the institutional opening of the digital field and promote the implementation of a negative list of cross-border trade in services across the country.
Create a digital trade demonstration zone, and guide local governments to carry out pilot trials based on open platforms such as pilot free trade zones, free trade ports, and service trade innovation development pilots.
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