The 14th Lujiazui Forum opened in Shanghai this morning with the theme of "Global Financial Openness and Cooperation: New Drivers for Economic Recovery".

At the forum, Li Yunze, Director General of the State Financial Regulatory Administration of China, Yi Gang, Governor of the People's Bank of China, Yi Huiman, Chairman of the China Securities Regulatory Commission, and Pan Gongsheng, Deputy Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange, all spoke at the forum.

The "head" of China's financial regulatory authorities spoke out at the same time, what important topics were discussed?

Li Yunze: Truly achieve "full coverage, no exceptions" in supervision

Li Yunze's speech involved effectively improving the effectiveness of serving the real economy, striving to create a new situation in financial supervision, resolutely fighting the active battle of preventing and controlling financial risks, continuing to deepen reform in key areas to promote development, and always adhering to the unwavering opening up of finance.

Li Yunze said that the economy is the body, finance is the bloodline, and the two live together and prosper. We will focus on the key to restoring and expanding effective demand, and continue to optimize and improve financial services. Among them, we must adhere to the "two unwavering", optimize the private investment and financing environment, strengthen the financial services of private enterprises, and protect the passion for the entrepreneurial development of private enterprises.

In terms of supervision, Li Yunze said that it is necessary to resolutely eliminate regulatory gaps and blind spots, clarify the responsibility boundary, tighten the responsibility chain, strengthen comprehensive governance, improve the responsibility system of multi-subject participation, multi-field collaboration and multi-level penetration, and truly achieve "full coverage and no exceptions" in supervision.

At the same time, strengthen the coordination of supervision between the central and local governments, improve institutional arrangements and work mechanisms, and achieve seamless docking and coordination between the central and local levels. Continue to rectify the chaos in the financial market and punish serious violations of laws and regulations. Effectively safeguard the legitimate rights and interests of financial consumers, and continuously enhance the sense of gain, happiness and security of the broad masses of the people.

Regarding the prevention and control of financial risks, Li Yunze said that the recent series of risk events in the international banking industry, although the direct impact on China is very small, but it also has a strong warning significance.

He said: At present, China's financial industry is running smoothly on the whole, risks are generally controllable, and we have full conditions and confidence in our ability to maintain the bottom line of systemic financial risks.

Yi Gang: Achieving the 30/60 goal requires "carrots and sticks"

Yi Gang said that to achieve the 30/60 target, China should complete the world's highest carbon emission intensity reduction and achieve carbon peak to carbon neutrality in the shortest time in global history. This is a broad and profound economic and social change, which means that China must undergo profound changes in industrial structure, energy structure, production mode, lifestyle and other aspects, of which green finance will play an important role in the smooth realization of the 30/60 goal.

Yi Gang said that after the central government made the 30/60 deployment, the central bank resolutely put green finance in a prominent position, focusing on three aspects: first, strengthening environmental information disclosure; The second is to improve the policy incentive and constraint system; The third is to carry out climate risk stress tests.

Yi Gang said that information disclosure is to let the society know who emits carbon and how much carbon, and all parties in society can measure and verify carbon emissions and carbon reduction behavior. Only by giving play to the role of social supervision and ensuring the authenticity and accuracy of carbon emission data can we prevent risks such as "greenwashing", capital arbitrage, and project fraud, and a series of other carbon emission reduction policies have a foundation.

He also believes that achieving the 30/60 goal requires "carrots and sticks". A significant increase in carbon emission costs can be understood as a "big stick", a modest increase is a "medium stick" or a "small stick", and the support tools set up by central banks are the "carrots" in the incentive mechanism. In 2021, the PBOC set up two monetary policy tools, the carbon emission reduction support tool and the special re-lending to support the clean and efficient use of coal, to support the development of key areas of carbon emission reduction.

Data show that as of the end of April 2023, the balance of carbon emission reduction support tools was nearly 4 billion yuan, and about 4000 billion yuan of loans were issued by financial institutions, driving carbon emission reduction to more than 6700 million tons, achieving relatively good results.

Yi Huiman: Continue to increase the rectification of risks in key areas such as "pseudo-private placement"

Yi Huiman talked about three aspects around unswervingly taking the road of modern capital market development with Chinese characteristics and better promoting Chinese-style modernization, including: supporting scientific and technological innovation more accurately and efficiently, and helping the construction of a modern industrial system; Adhere to the coordinated development of investment and financing to better serve the diversified financial needs of residents; Adhere to the main business of supervision and firmly guard the bottom line of risk.

Yi Huiman said that in accordance with the idea of unifying corporate bonds and corporate bonds and promoting coordinated development, the CSRC will accelerate the improvement of institutional rules, comprehensively deepen the function of the bond market, better support the implementation of major national strategies and the construction of major projects, and help build a modern industrial system.

At the same time, closely focusing on the fundamental direction of serving the high-quality development of the real economy, we will study the differentiated institutional arrangements of the capital market, improve the multi-level capital market system, increase product innovation and institutional supply such as equity and debt financing, mergers and acquisitions, and REITs, strengthen the influence of commodity futures prices, help build strategic emerging industrial clusters, support the transformation and upgrading of traditional industries, promote industrial intelligence, greening and integration, and guide more resources to gather in key areas of the modern industrial system.

Yi Huiman stressed that the relevance and systematization of current macroeconomic and financial risks have been further enhanced, which has put forward new requirements for the smooth operation of the capital market. We will work with relevant parties to strengthen macro research and judgment, closely track and analyze imported risks in the international financial market, improve cross-market and cross-industry cross-border risk monitoring and early warning mechanisms, and continuously improve the comprehensive efficiency of risk response. Innovate methods, highlight key points, resolve bond default risks in a sound and orderly manner, and continue to increase the rectification of risks in key areas such as "pseudo-private placements" and local trading venues. Continue to promote capital market reform, stimulate market vitality, strengthen policy coordination with relevant parties, stabilize and boost market confidence, keep the bottom line, and make every effort to maintain the smooth operation of the stock market, bond market and futures market.

Pan Gongsheng: The RMB exchange rate is expected to remain relatively stable and cross-border capital flows

Pan Gongsheng pointed out that since the beginning of 2023, the forecasts of international financial organizations for China's economic growth have been generally revised upward. The International Monetary Fund (IMF) raised its forecast for China's economic growth this year to 4.4% in April from 4.5%. Two days ago, the World Bank released its latest global economic prospects, raising its forecast for China's economic growth this year to 2.4% from 3.5%.

Pan Gongsheng believes that RMB assets have competitive real interest rates, which provides a good ability to preserve the value of RMB assets held by Chinese trading and investment partners. Measured by the yield of 2-year government bonds minus the core consumer price index (CPI), China's real interest rate is around 1.7%, which is comparable to the real interest rate of US Treasury bonds after the sharp interest rate hike, and significantly higher than the interest rate level of similar products in developed economies such as Germany and Japan.

He bluntly said that in the context of high global inflation, RMB bonds have good portfolio diversification value. Since 2022, government bonds and equities in developed countries have seen a significant decline, and the diversification value of bonds hedged by stocks has traditionally decreased significantly. The correlation coefficient between Chinese bonds and global equity returns remains in the negative range, with good portfolio diversification value.

Pan Gongsheng also said that since mid-April, the dollar index has begun to strengthen after mid-April, driven by a variety of internal and external factors, especially the US dollar index, driven by the US debt ceiling problem, the risk problem of small and medium-sized banks, and the rising expectations of the Fed's interest rate hike. At the same time, coupled with the domestic economic recovery foundation is not yet stable, the RMB exchange rate has experienced some fluctuations, but the foreign exchange market is generally stable, and the RMB exchange rate is expected to remain relatively stable with China's cross-border capital flow.

"Over the years, we have accumulated a lot of experience in dealing with external shocks, and the macro-prudential policy tools of the foreign exchange market have become richer. We have the confidence, conditions and ability to maintain the stable operation of China's foreign exchange market. Pan Gongsheng said.