On October 15, 2017, Governor Zhou Xiaochuan of the People's Bank of China delivered a speech at the International Monetary Fund / World Bank Annual Meeting in Washington at the G30 International Banking Seminar on China's economic outlook. The main contents are as follows:
China's economic growth has continued to slow over the past few years, and since then over 10% to around 8% in 2012, it continued to 6.7% in 2016. butEconomic growth momentum has rebounded this year, the first half GDP growth of 6.9% in the second half is expected to achieve 7%.The driving force for economic growth is mainly due to the rapid growth of consumption in the household sector. The total retail sales of social consumer goods increased by 10.4% from January to August, and the consumer objects gradually shifted from the traditional goods to service. Therefore, the service industry accelerated, and the tertiary industry added value to GDP The proportion increased from about 40% in 15 years to the current 55%. Economic growth to promote the overall stability of employment, 1 - August new urban employment of about 10 million people. This is also the size of China's huge population needs to maintain the employment growth rate. At the same time, CPI grew 1.8%, PPI increased by 6.3%, nominal GDP growth of 9.5%.
From the money supply and credit data, since the beginning of this year, China has entered a deleveraging process, broad money supply M2 growth slowed down, currently less than 9%. The overall leverage rate began to decline.Although the magnitude is small, but the trend has been formed. After the financial crisis, China began to implement a proactive fiscal policy and monetary policy to deal with the crisis, so in 2009 after two years, China's debt accounted for a significant increase in the proportion of GDP, but it is worth it, because the Chinese economy quickly recovered from the crisis. Now, China needs to pull down the leverage rate.
Thanks to the improvement of the external environment, China's import and export performance has been better this year, with a trade surplus of $ 400 billion, down 20% from the same period last year. However, imports, especially in the service sector, grew rapidly, Accounting for the proportion of GDP will fall to 1.2%. From the international comparison, China's balance of payments imbalance is low.
About leveraging.China's overall macro-leverage is higher. The proportion of government debt to GDP is not high; the proportion of household debt to GDP is still low, but the growth is faster; the main problem is that the proportion of corporate sector debt to GDP is higher. Thanks to the low interest rate environment, the current debt service rate is still relatively reasonable. Many people may ask why companies have such a high leverage, why financial institutions, especially commercial banks are willing to provide so much loans to enterprises. One of the reasons is that many economists have pointed out that the Chinese local government through a variety of financing platform loans, the formation of more debt, which is statistically reflected as corporate sector debt, will lead to corporate sector debt overvalued. If this part of the statistics for the government debt, corporate sector debt will be significantly reduced, the corresponding increase in government debt, this debt structure is more balanced. Therefore, the choice of China's leverage, not only depends on state-owned enterprises and other corporate sector debt and bank credit issues, but also should pay attention to local government debt problems, while the latter and promote the process of urbanization. The IMF's Consultative Group on Article 4 also advises us that the intergovernmental fiscal relationship should be carefully studied and the central and local fiscal revenue and expenditure responsibilities should be reformed.
On overcapacity and urbanization.China has begun to cut excess capacity in the steel and cement industries. There are two main reasons for the overcapacity of these industries: one is large-scale infrastructure construction, the other is the process of urbanization soon, both require a lot of steel and cement. China's infrastructure has been greatly improved, but the process of urbanization is still in progress. According to the census, the urbanization rate is about 50%. If you use the sample analysis method to count the population of the population for six months in the town, the urbanization rate is only about 40% The urbanization rate is 57%. This means that a large number of farmers are still migrating to the city, although these people may have been found in the city work, but not yet settled in the city settled. So China's urbanization process is still in the high-speed development stage, resulting in a greater demand for steel and cement. The Chinese government hopes to promote structural reform and optimization, and attach great importance to environmental protection, so voluntary reduction of 10% of steel and cement production capacity. At present, the production capacity has achieved positive results, is expected to complete the established goals.
With regard to the transfer of comparative advantage,Many of China's labor-intensive industries have now moved to ASEAN and Southeast Asia, and more and more Chinese investors have invested in Africa to transfer some of their industries to Africa. So the service industry in the Chinese economy accounted for more and more, this is a very good phenomenon. But there are still problems in the competitiveness of the service industry is not enough. Although there are some advantages of industry, but the medical education and other industries are still relatively weak, still need further efforts.
On financial stability. In July this year, the National Financial Work Conference decided to set up a Financial Stability Development Committee, the future will focus on four issues. One is the shadow bank.In fact, we have started to tackle this problem two years ago, and we have made positive progress. Many shadow banking operations have returned to the banking sector and are included in the commercial bank balance sheet.Second, the asset management industry.This issue is more complex, the CBRC, the SFC and the CIRC three separate regulatory regulators for the same asset management behavior may have different regulatory requirements, we agree with the Financial Stability Council recommendations, should be straightened out and streamlined the management of the industry The regulation.Third, the Internet finance.At present, many technology companies have begun to provide financial products, some companies have obtained a license, but some do not have any license but still provide credit and payment services, the sale of insurance products, which may bring competition and financial stability risk.Fourth, financial holding company.We have observed that some large private enterprises are acquisitions of various financial services licenses through mergers and acquisitions, but are not really financial holding companies, there may be related party transactions and other illegal activities, and we have no corresponding cross-sectoral regulatory policies.
The future we will further deepen the reform, and gradually promote the economy to leverage. At the same time, strengthen financial supervision and coordination, promote the steady and healthy development of financial markets, and maintain financial stability.
David Marsh, Chairman of the Official Forum on International Monetary and Financial Institutions (OMFIF)Some people say that the current global existence of "leadership vacuum", do you think this time is China's reform in the international monetary system to enhance the leadership of the moment? You mentioned in the speech the various positive performance of the Chinese economy, which seems to discuss the reserve monetary system reform, the role of special drawing rights, currency exchange mechanism normalization and other issues to promote China's proposition to provide an opportunity.
A: In recent years, with the rapid development of China's economy, China has played a certain role in international economic governance, including participation in the reform of the reserve monetary system and the formulation of policies such as trade and financial stability. But China is still focused on solving domestic problems, including how to continue to promote economic development, promote regulatory reform, so as to keep up with the pace of global development.
It is encouraging to see that the International Monetary Fund will be included in the SDR currency basket, which is encouraging and will inspire China to further promote reform and opening up and make better use of the renminbi as a free currency. While China has aggressively strengthened its cooperation with the International Monetary Fund, the Bank for International Settlements and the Financial Stability Board, it has participated in the standard setting process, but there is still a long way to go and play a bigger role.
Currency swaps are an unexpected product of the global financial crisis. Since the outbreak of the global financial crisis in 2008, due to the lack of hard currency, bank development agent relationship is also facing difficulties, neighboring countries proposed to sign a local currency exchange agreement with China to support regional trade development and facilitation. At first, some economies in Korea, ASEAN and Central Asia, and later gradually extended to other parts of the world, such as Argentina, Ukraine and Egypt. Therefore, the currency swap mechanism can be said to be an unexpected product of the financial crisis. China supports the further development of a global safety net, which may be more effective than bilateral arrangements.
Citigroup's former president, Bill Rhodes, asked:Last year you had expressed concern about the rise in China's debt-to-GDP ratio, but felt that you were optimistic about China's debt problem this year, and the Chinese government is now actively taking steps to tackle the debt problem. Do not know whether the above judgment is correct?
A: On the issue of debt, it should be noted that in the process of urbanization, there is a high degree of fiscal transparency, intergovernmental fiscal relations to be straightened out, the lack of clear fiscal discipline restricting local governments and other issues, so the financial market pricing of local government bonds There are distortions, the pricing of loans to local government financing platform is also distorted, which led to commercial banks and the financial sector underestimated the local government financial risks. Believe that these issues will be gradually resolved, the financial market will become more transparent and healthy. The National Financial Work Conference, which was held in July this year, also stressed the need to pay attention to government debt risk and should also see that government debt risk is lower compared with private sector debt and external debt, and we will actively respond to the problem by promoting fiscal reform.
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