Three top financial regulators on inflation, green finance, monetary policy, financial risk, STAR Market, etc.

Latest from Yi Gang, Guo Shuqing, and Yi Huiman on June 10

The 13th Lujiazui Forum, co-hosted by Shanghai Municipal People's Government, the People's Bank of China, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission, opened in Shanghai on June 10, 2021.

Below are the main content of the speeches at the forum by Yi Gang, Governor of the People’s Bank of China; Guo Shuqing, Communist Party Secretary of the People’s Bank of China and Chairman of the China Banking and Insurance Regulatory Commission; and Yi Huiman, Chairman of China Securities Regulatory Commission. All emphasis are your Pekingnologist’s.

What has been omitted here is only the courtesy parts of their speech - nothing concrete was omitted.

Yi Gang mainly talked about China’s monetary policy, green finance, and inclusive financing.

Guo Shuqing mainly talked about the effect of easy money policies from developed countries, inflation (which is a quite hot topic in recent days), China’s ongoing taming of financial risks. He also sent stern warnings of Ponzi schemes and speculation on real estate prices.

Yi Huiman gave a detailed elaboration of the two-year-old STAR Market (known in Mandarin as 科创板 Science and Technology Innovation Board in Shanghai Stock Exchange) and explained why the IPO there appears to many as have been slowed.

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Part I

Below is the major content of the speech of Yi Gang, Governor of the People’s Bank of China

今天,我想借此机会,围绕货币政策、绿色金融和普惠金融发展等话题同大家进行交流。当前我国进入新发展阶段,我们观察到人口结构、资源结构、产业结构、区域结构等都在发生深刻调整和变化,对潜在经济增长和物价水平产生影响。

Today, I would like to take this opportunity to communicate with you on topics such as monetary policy, green finance, and the development of inclusive financing. At present, our country has entered a new stage of development, and we have observed that the population structure, resource structure, industrial structure, and regional structure are undergoing profound adjustments and changes, which have an impact on potential economic growth and price level.

在从高速增长转向高质量发展的过程中,我国经济总量基数越来越大,同时受劳动生产率增速下降和人口结构变化等影响,潜在经济增长率会有一定减缓。人口结构变化也会对经济供给和需求两侧产生影响,在人口老龄化趋势下,以资本和劳动投入来拉动经济的增长模式难以为继,未来可持续增长主要靠提高全要素生产率,并通过一系列改革措施释放经济增长潜力。去年以来,尽管受到新冠疫情的严重冲击,但如果从去年和今年两年平均来看,我们预测我国GDP增速将接近于潜在增长率水平。

In the process of shifting from high-speed growth to high-quality development, our country's aggregate economic base is getting bigger and bigger, and the potential economic growth rate will slow down to some extent due to the decline of labor productivity growth rate and the change of population structure. The change of population structure will also have an impact on both supply and demand of the economy. Under the trend of population aging, the economic growth model driven by capital and labor input is unsustainable. Sustainable growth in the future mainly depends on improving the total factor productivity and releasing the economic growth potential through a series of reform measures. Since last year, despite the severe impact of COVID-19, if we look at the average of last year and this year, we predict that China's GDP growth rate will be close to the potential growth rate.

货币政策要关注结构变化对物价的影响。人口老龄化会导致居民预防性储蓄上升、消费倾向下降,因此对通胀产生抑制作用。而绿色转型会使物价走势有所上升。什么是绿色转型?绿色转型就是使人们的生产和生活方式转向低碳模式。因为碳排放能源是大头,简单地说绿色转型就是鼓励大家多用清洁能源,少用化石能源。但问题是在现有技术条件下,从整体上看化石能源便宜且稳定,清洁能源贵且尚不稳定,这就是所谓“绿色溢价”,因为化石能源碳排放成本基本上没有体现。绿色转型的任务就是对碳排放加以限制,使碳排放的成本显性化,也就是说要求排放者对增量的碳排放付出成本,同时对存量的碳排放权通过定价实现可交易,使得减排者获得收益,也使得排放者付出适当成本,从而鼓励生产和消费向低碳方式转型。这一过程客观上会导致和碳排放有关的成本上升,进而带来结构性价格上涨的压力。以上分析有对价格下跌的压力,有对价格上涨的压力,不同方向的价格压力会在一定程度上相互对冲,从而有利于在整体上稳定物价。

Monetary policy should pay attention to the influence of structural changes on prices. The aging of the population will lead to the increase of residents' precautionary savings and the decline of consumption tendency, thus inhibiting inflation. And the green transformation will make the price trend go upward. What is the green transformation? The green transformation is to turn people's production and lifestyle into a low-carbon model. Because carbon-emission energy is a big part (of the economy), so simply speaking, green transformation is to encourage people to use more clean energy and less fossil energy. However, under the existing technological conditions, generally speaking, fossil energy is cheap and stable, while clean energy is expensive and unstable, which is called the "green premium"- the cost in carbon emission of fossil energy is basically not reflected (in its price). The task of green transformation is to limit carbon emissions and make the cost of carbon emissions explicit. That is to say, emitters are required to pay for incremental carbon emissions, and at the same time, the existing carbon emission rights can be traded through pricing, so that emission reducers can gain benefits and emitters can pay appropriate costs, thus encouraging the transformation of production and consumption to low-carbon mode. This process will objectively lead to the cost increase related to carbon emissions, and then bring the pressure of structural price increase. According to the above analysis, there are pressures that may lead price to decline and also price to increase. The pressure in different directions will hedge each other to a certain extent, which is conducive to overall price stability.

近期全球原油等大宗商品价格上涨较快,全球通胀水平短期上升已成事实,但对通胀是否能长期持续下去,存在着巨大分歧。我国去年疫情期间坚持实施正常货币政策,国内总需求比较平稳,有利于保持物价总体稳定。今年以来我国PPI增幅较高,一定程度上与去年PPI为负形成的低基数有关,所以我们可以用去年今年和明年连续三年的整体视角来观察PPI变化。综合各方面因素判断,今年我国CPI走势前低后高,全年的CPI平均涨幅预计在2%以下。当然,外部的疫情形势、经济回升、宏观形势和宏观政策等都有不确定性,对来自各方面的通胀和通缩的压力均不可掉以轻心。

Recently, the prices of global crude oil and other commodities have risen rapidly, and the short-term rise of global inflation has become a reality. However, there are huge differences in (people’s minds) whether inflation can last for a long time. China adhered to the normal monetary policy during COVID-19 last year, and the total domestic demand was relatively stable, which was conducive to maintaining the overall price stability. Since the beginning of this year, China's PPI growth has been relatively high, which is related to the low base formed by negative PPI last year, so we can observe PPI changes from the overall perspective of last year, this year, and next year - three consecutive years. Judging from various factors, this year's CPI trend in China is low in the early days and then high in the later days, and the average annual CPI increase is expected to be below 2%. Of course, there are uncertainties in the external COVID-19 situation, economic recovery, macro situation, and macro policies, and the pressure of inflation and deflation from all sides should not be taken lightly.

考虑到我国经济运行在合理区间内,在潜在产出水平附近,物价走势整体可控,货币政策要与新发展阶段相适应,坚持稳字当头,坚持实施正常的货币政策,尤其是注重跨周期的供求平衡,把握好政策的力度和节奏。目前国内利率水平虽比主要发达经济体高一些,但在发展中国家和新兴经济体中仍相对较低,总体保持在适宜的水平,有利于各市场的稳定健康发展。要继续深化利率市场化改革,释放贷款市场报价利率改革潜力。要继续完善以市场供求为基础、参考一篮子货币进行调节、有管理的浮动汇率制度,促进内外平衡,保持人民币汇率在合理均衡水平上的基本稳定。在保持总量政策适度的前提下,货币信贷政策将主要强调两大结构性方面。

Considering that China's economy is running in a reasonable range, and the price trend is controllable as a whole near the potential output level, monetary policy should adapt to the New Development Stage, adhere to the principle of stability, adhere to the implementation of normal monetary policy, especially pay attention to the cross-cycle balance between supply and demand, and manage well the strength and rhythm of the policy. At present, although the domestic interest rate level is higher than that of major developed economies, it is still relatively low in developing countries and emerging economies, and it is generally at an appropriate level, which is conducive to the stable and healthy development of various markets. We shall continue to deepen the reform of interest rate marketization and release the potential of the Loan Prime Rate reform. We shall continue to improve the managed floating exchange rate system based on market supply and demand, adjusted with reference to a basket of currencies, promote the balance between internal and external, and keep the RMB exchange rate basically stable at a reasonable and balanced level. On the premise of keeping the money supply appropriate, monetary and credit policies will mainly emphasize two structural aspects.

第一,扎实推动绿色金融发展。实现碳达峰、碳中和目标,是党中央作出的重大战略决策。人民银行积极运用结构性货币政策等工具,多措并举助力经济的绿色转型和碳达峰、碳中和目标的实现。一是完善绿色金融标准体系。人民银行、银保监会等部门较早制定了绿色债券和绿色信贷的标准。同时与欧盟有关部门等方面紧密合作,共同推动绿色分类标准的趋同。二是建立气候环境信息披露制度。推动国内主要商业银行披露气候变化相关信息,并研究推广至上市公司等市场主体。未来,将建立统一的信息披露标准。三是激励金融部门加大对绿色产业的资金支持。研究碳减排支持工具。四是引导金融机构防范气候变化风险。人民银行已开展金融机构气候变化风险压力测试,并持续监测评估金融机构绿色转型。要充分考虑现有基础设施的投入成本、预期使用寿命和折旧的实际情况,稳妥设计转轨参数和动态风险权重,努力实现在绿色转型的过渡期平稳转轨。

First, solidly promote the development of green finance. It is an important strategic decision made by the Communist Party of China Central Committee to achieve the goal of carbon peaking and carbon neutralization. The People's Bank of China actively uses structural monetary policy and other tools to help the green transformation of the economy and achieve the goals of carbon peaking and carbon neutrality. First, improve the system of standards on green finance. The People's Bank of China, China Banking and Insurance Regulatory Commission, and other departments formulated the standards of green bonds and green loans earlier. At the same time, we will work closely with relevant departments of the European Union to jointly promote the convergence of green classification standards. The second is to establish a climate and environmental information disclosure system. Promote domestic major commercial banks to disclose information related to climate change, and research and promote it to market entities such as publicly traded companies. In the future, a unified information disclosure standard will be established. The third is to encourage the financial sector to increase financial support for green industries. (We will) Research on supporting tools for carbon emission reduction. Fourth, guide financial institutions to guard against climate change risks. The People's Bank of China has conducted stress tests on climate change risks of financial institutions, and continuously monitored and evaluated the green transformation of financial institutions. It is necessary to give full consideration to the actual situation of input cost, expected service life, and depreciation of existing infrastructure, steadily design transition parameters, and dynamic risk weights, and strive to achieve a smooth transition in the transition period of green transformation.

第二,坚持发展普惠金融。近年来我们持续加大对小微企业和个体工商户的金融支持。实现保就业保民生,实现增收入促消费,从而稳住经济基本盘。我们始终坚持市场化、法治化原则,健全激励相容机制,强化商业银行信贷风险管控能力。目前普惠小微贷款已支持3600多万户小微企业和个体工商户。我们将继续运用结构性货币政策工具,发挥部门政策合力,引导银行在商业可持续的前提下,加大首贷、信用贷支持力度。鼓励银行与企业按照商业可持续原则,加强贷款风险防范。深入开展中小微企业金融服务能力提升工程,强化金融科技手段运用,推广随借随还模式,促进商业银行加快形成敢贷、愿贷、能贷、会贷的长效机制。

Second, insist on developing inclusive financing. In recent years, we have continuously increased financial support for small and micro enterprises and individual business households. We will ensure employment and people's livelihood, increase income and promote consumption, thus stabilizing the basic economic situation. We always adhere to the principles of marketization and rule of law, improve the mechanism of incentive compatibility, and strengthen the credit risk management and control ability of commercial banks. At present, our inclusive small-and-micro loans have supported more than 36 million small and micro enterprises and individual business households. We will continue to use structural monetary policy tools, give full play to the joint efforts of departmental policies, and guide banks to increase the support for first-time loans and credit-based loans on the premise of commercial sustainability. (We shall) encourage banks and enterprises to strengthen loan risk prevention in accordance with the principle of commercial sustainability. (We will) facilitate commercial banks’ improvement of financial service capacity for serving small and medium-sized enterprises (SMEs), strengthen the use of financial technology, promoting the loan-as-you-go model, and promote a long-term mechanism that enables commercial banks dare, willing, capable, and good at loaning to to SMEs.

推动上海国际金融中心建设,要以习近平新时代中国特色社会主义经济思想为指引,增创国际合作和竞争新优势,以国际循环提升国内大循环的效率和水平。近日,中央再次就支持浦东新区高水平改革开放提出明确意见和要求,支持上海进一步完善金融市场体系、产品体系、机构体系、基础设施体系,增强全球资源配置能力。我曾在之前的陆家嘴论坛上提出,上海国际金融中心一定是基于人民币资产形成的国际金融中心。随着全球配置人民币资产需求的增加,将衍生出对人民币资产的风险管理、法治环境、人才供给等一系列需求。在此过程中,上海将成为人民币资产配置中心、风险管理中心、金融科技中心、优质营商环境示范中心和金融人才中心,将成为更有竞争力的国际金融中心。对此,我们充满信心。

We shall promote Shanghai as an international financial center, taking Xi Jinping Economic Thought on Socialism with Chinese Characteristics for a New Era as the guide, create new advantages in international cooperation and competition, and improve the efficiency and level of the domestic circulation with international circulation. Recently, the Communist Party of China Central Commitee once again put forward clear opinions and requirements on supporting the high-level reform and opening up in Pudong New Area, and supported Shanghai to further improve its financial market system, system of products, institutional system, and infrastructure system, and enhance its capacity on global resource allocation . I once pointed out at the Lujiazui Forum that Shanghai as an international financial center must be an international financial center based on RMB assets. With the increasing global demand for RMB assets, there will be a series of demands for risk management, legal environment, and talent supply on RMB assets. In this process, Shanghai will become an asset allocation center, risk management center, financial technology center, high-quality business environment demonstration center, and financial talent center on RMB, and will become a more competitive international financial center. To this, we are full of confidence.

下一步,人民银行将一如既往地支持上海国际金融中心建设工作。支持上海强化全球资源配置功能,打造促进双循环的绿色金融枢纽,推动长三角一体化高质量发展,助力上海成为新发展格局下联通国际市场和国内市场的重要枢纽和桥梁。

In the next step, the People's Bank of China will, as always, support the buidling of Shanghai into an international financial center. (We shall) support Shanghai to strengthen its function in global resource allocation, build a green financial hub to promote “dual circulation,” promote the integrated and high-quality development of the Yangtze River Delta, and help Shanghai become an important hub and bridge to connect the international market and the domestic market in the New Development Paradigm.

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Part II

Below is the main content of the speech by Guo Shuqing, Communist Party Secretary of the People’s Bank of China and Chairman of the China Banking and Insurance Regulatory Commission.

2020年以来,为应对百年一遇的疫情大流行,发达国家纷纷推出超级经济刺激计划。在财政猛烈扩张的同时,货币政策达到前所未有的宽松程度。美联储资产负债表已扩张将近一倍,欧央行扩张一多半,日本银行扩张超过四分之一。这些超常规举措,短期内确实起到了稳定市场、稳定人心的作用。但是相伴而来的负面效应则需要全世界各国来共同承担。首先,发达国家的金融资产和房地产价格普遍出现较大幅度上涨。特别是股票市场很快就达到了创纪录的高水平。经常爬山的人都知道,越是陡峭的山峰,上去不易,下来更难。第二,通货膨胀像约定好了一样,如期而至。而且比美欧同事们所预料的幅度要高出一截,至于将要持续的时间似乎也不像许多专家预测的那样短暂。 第三,当财政支出已经在很大程度上靠中央银行印钞来支撑时,就像一架飞机在空中进入自转旋涡,很难由自己顺利改飞出来。2008年前,美联储的资产负债表只有8000多亿美元,如今已将近8万亿美元,而且美国联邦债务与GDP之比已超过二战时期创造的最高记录。第四,世界疫情现阶段还有诸多不确定性,全球产业链和供应链局部受阻或断裂的风险仍然较大。本来最需要各国同舟共济、共克时艰,但还有少数发达国家不断制造麻烦,继续奉行所谓本国优先的单边主义,事实上首先损害其本国人民的利益。例如,对来自中国的产品保留高关税,客观上推动通货膨胀上升更快。第五,面对美欧开闸泄洪产生的溢出效应,新兴市场经济体和发展中国家不得不采取痛苦的应对举措。俄罗斯、土耳其、巴西央行已启动加息,有的发达经济体也开始释放收缩信号。从全球宏观经济来观察,这些政策取向的利弊得失目前还很难作出结论。

Since 2020, in response to the once-in-a-century pandemic, developed countries have launched extraordinary economic stimulus plans. In the meantime of the rapid expansion in spending, monetary policy has reached an unprecedented degree of easing. The balance sheet of the Federal Reserve has nearly doubled, the European Central Bank has expanded by more than half, and the Bank of Japan has expanded by more than a quarter. These extraordinary measures have indeed played a role in stabilizing the market and people's minds in the short term. However, the accompanying negative effects will have to be shared by all countries in the world. First of all, financial assets and real estate prices in developed countries have generally increased by a large margin. In particular, the stock market quickly reached a record-high level. People who often climb mountains know that the steeper the mountain, the harder it is to get up and even harder it is to get down. Second, as if it was agreed in advance, inflation arrived as scheduled. Moreover, it is a bit higher than that predicted by U.S. and European colleagues. As for the duration, it seems that it will last not as short as that predicted by many experts. Third, when the fiscal expenditure has been supported by the central bank printing money to a great extent, it is just like an airplane entering the rotation vortex in the air, and it is difficult for it to fly out smoothly by itself. Before 2008, the balance sheet of the Federal Reserve was only over $800 billion, but now it is nearly $8 trillion, and the ratio of federal debt to GDP in the United States has exceeded the highest record set during World War II. Fourth, there are still many uncertainties in the current COVID-19 situation in the world, and the risk of partial blockage or breakage of global industrial chains and supply chains is still relatively high. This should have been the time when all countries - we are in the same boat - help each other and overcome difficulties together. However, a few/certain developed countries/country kept creating troubles and continued to pursue the unilateralism of so-called “its own country First”. In fact, they first harmed the interests of their own people. For example, keeping high tariffs on products from China objectively promotes inflation to rise faster. Fifth, facing the spillover effect of easy money in the United States and Europe, emerging market economies and developing countries have to take painful countermeasures. The central banks of Russia, Turkey and Brazil have started to raise interest rates, and some developed economies have also started to release signals of tightening. From the perspective of global macroeconomics, it is difficult to draw conclusions about the advantages and disadvantages of these policies.

中国在强化宏观政策应对时,没有搞“大水漫灌”。一些国家批评中国应对政策力度不够、对全球经济恢复的贡献不足。这显然是出于偏见或误解。事实上,我们的政策力度并不算小。从货币金融政策来看,2020年,银行贷款新增19.6万亿元,增速12.8%,社会融资规模增加35万亿元,增速13.3%,这在世界上是很少有的。通过降低贷款利息和减少服务收费,去年金融系统向实体经济让利1.5万亿元。从财政税收政策看,2020年我国对企业和居民新增减税降费超过2.5万亿元。公共预算赤字率3.7%,加上新增抗疫国债、地方政府专项债、政策性银行额外增加投入等,这些数字合计起来与名义GDP之比已超过10%。更重要的是,我们的应对政策取得最好效果。2020年中国经济实现正增长,促进了周边国家和主要贸易伙伴的经济复苏,阻止了世界经济陷入更大萎缩。中国在相当一段时期内供应了全球一半左右最终产品,而且总体上没有提高出口离岸价格,为全球疫情防控和经济恢复奠定了坚实基础。如果说最发达国家大量印发的货币形成了拉动全球通胀的动力源,那么,中国数亿劳动者生产的商品就是稳定全球通胀的千钧锚。

When China strengthened its macro-policy response, it did not engage in “flooding” (massive stimulus). Some countries criticized China for its inadequate response and its insufficient contribution to the global economic recovery. This is obviously due to prejudice or misunderstanding. As a matter of fact, our policy strength was not too small. From the perspective of monetary and financial policies, in 2020, bank loans increased by 19.6 trillion yuan, with a growth rate of 12.8%, and the scale of social financing increased by 35 trillion yuan, with a growth rate of 13.3%, which is rare in the world. By reducing loan interest and service charges, the financial system ceded a profit of 1.5 trillion yuan to the real economy last year. From the perspective of fiscal and tax policies, in 2020, China increased tax reduction and fee reduction for enterprises and residents by more than 2.5 trillion yuan. The public budget is 3.7% in deficit ratio, plus new anti-pandemic national debt, special local government debt, additional investment by policy banks, etc., and the ratio of these figures to nominal GDP has exceeded 10%. More importantly, our response policies have achieved the best results. China's positive economic growth in 2020 has promoted the economic recovery of neighboring countries and major trading partners, and prevented the world economy from falling into greater contraction. China supplied about half of the world's final products for quite a period of time and generally has not raised the export FOB price, laying a solid foundation for global pandemic prevention and control and economic recovery. If a large number of currencies issued by the most developed countries form the driving force for global inflation, then the products by hundreds of millions of Chinese workers are the anchor for stabilizing global inflation.

为什么我们的财政金融支持政策有那么大的力度,而央行资产负债表能够保持不变呢?首先是因为党中央着眼全局的宏观决策统筹兼顾、科学合理,国务院和国务院金融委的安排指挥切合实际、精准有效。其次是因为金融系统坚定不移地整治脱实向虚现象,坚决降低内部杠杆率,同业理财、同业投资、委托贷款和信托通道业务持续减少,高风险影子银行不断收缩。第三是因为我国央行资产负债表具有特殊优势,持续多年的稳健政策使得存款准备金率保持在较高水平,与此同时利率汇率的市场化改革又卸下了沉重包袱。所以,和发达国家央行购买资产扩表不同,我国通过降低存款准备金率,适当增加定向再贷款,推动商业银行向实体经济发放更多贷款,与此同时引导更多社会储蓄转化为直接投资和证券投资,显著地扩大了中国和世界迫切需要产品的生产和供应能力,推动了经济的绿色转型进程。

Why is our fiscal and financial support policy so strong but the balance sheet of the central bank can remain unchanged? First of all, the overall macro decision-making of the CPC Central Committee is balanced, scientific and reasonable, and the arrangement and command of the State Council and the financial stability and development committee under the State Council are practical, accurate and effective. Secondly, because the financial system has steadfastly rectified the phenomenon where money left the real economy to the virtual one (finance), and resolutely reduced the internal leverage ratio, the business of inter-bank wealth management, inter-bank investment, entrusted loans, and trust channel businesses continued to decrease, and the high-risk shadow banking continued to shrink. Third, because the balance sheet of China's central bank has special advantages, the steady policy that lasted for many years has kept the deposit reserve ratio at a high level, and at the same time, the market-oriented reform of interest rate and exchange rate has unloaded a heavy burden. Therefore, unlike the balance sheet expansion upon assets purchases by the central banks in developed countries, China has promoted commercial banks to issue more loans to the real economy by reducing the deposit reserve ratio and appropriately increasing targeted refinancing, while at the same time guiding more savings in the society into direct investment and securities investment, significantly expanding the production and supply capacity of urgently needed products in China and the world, and promoting the green transformation process of the economy.

中国已经进入新发展阶段,我们将深入贯彻新发展理念,积极推进供给侧结构性改革,不断增强和提升国内国际双循环相互促进的格局。从金融角度来看,必须进一步扩大对外开放,健全公司治理结构,加快市场化兼并重组,规范互联网平台,促进公平竞争。要抓紧推进传统金融服务数字化转型,促使金融机构能够更精准服务实体经济,更精准防范金融风险。发展普惠金融,加强小微企业和弱势群体金融服务,切实促进共同富裕。发展绿色金融,为确保如期实现碳达峰碳中和目标提供有力金融支撑。发展科技金融,通过多种方式支持自主创新和自立自强。

China has entered a New Development Stage, and we will thoroughly implement the New Development Philosophy, actively promote the structural reform on the supply side, and continuously enhance and upgrade the pattern of dual circulation in which domestic and overseas circulation reinforce each other. From the financial point of view, it is necessary to further open to the outside world, improve the corporate governance structure, speed up market-oriented mergers and acquisitions, regulate the Internet platform and promote fair competition. We shall step up the digital transformation of traditional financial services so that financial institutions can serve the real economy more accurately and prevent financial risks more accurately. We shall develop inclusive financing, strengthen financial services for small and micro enterprises and vulnerable groups, and effectively promote common prosperity. We shall develop green finance, and provide strong financial support for realizing the goal of carbon peaking and carbon neutralization on schedule. We shall develop technology and finance and support independent innovation and self-reliance in various ways.

现阶段最突出的一项任务就是进一步加大直接融资比重。在去年新增社会融资规模中,债券和股票融资占比已经达到37%左右,还可以有更大的发展空间,特别是债券市场还有很大潜力。妨碍其健康成长的一个主要短板是,债券市场法制还不够健全。迫切需要让各级政府、企业、中介机构和投资者都认识到逃废债不仅是不道德的行为,而且是违法违规甚至是犯罪的行为。根本性举措是加快以信息披露为核心的注册制改革,真正加强投资者适当性管理,确保发行方、中介机构、投资者严格依法履行各自义务,承担各自责任。

At present, the most prominent task is to further increase the proportion of direct financing. In the scale of new total social financing last year, the proportion of bond and stock financing has reached about 37%, and there is still more room, especially the bond market has great potential. One of the main shortcomings hindering its healthy growth is that the bond market is not disciplined enough. There is an urgent need for governments, enterprises, intermediaries and investors at all levels to realize that debt evasion is not only immoral, but also illegal and even criminal. The fundamental measure is to speed up the reform of the registration-based (contrary to administrative approval-based) system with information disclosure at the core, truly strengthen the management of investors' suitability, and ensure that issuers, intermediaries, and investors strictly fulfill their respective obligations and assume their respective responsibilities according to law.

经过化解重大金融风险三年攻坚战,过去我们面临的多个方面的金融风险都出现了收敛趋势。但是,防范风险是金融工作的永恒主题。我们必须居安思危,一刻也不能松懈。就当前而言,需要重点关注以下几个方面。

After three years of tough battles to resolve major financial risks, many financial risks we faced in the past showed a trend of decline. However, risk prevention is the eternal theme of financial work. We must be prepared for danger in times of peace, and we must not relax for a moment. At present, we need to focus on the following aspects.

第一,积极应对不良资产反弹。为受疫情影响的中小微企业贷款本息实施延期,预计将有一定比例最终劣变为不良。一些地方房地产泡沫化金融化倾向严重,相当数量的政府融资平台偿债压力很大,部分大中型企业债务违约比例上升,加剧了银行机构的信用风险。部分中小金融机构面临的形势更为严峻。必须督促银行机构做实资产分类,加大拨备计提力度,确保能够更快更多地处置不良资产。

First, actively respond to the rebound of non-performing assets. The extension of loan principal and interest for small, medium and micro enterprises affected by COVID-19 is expected to result in a certain proportion of bad loans. In some places, the tendency of growing into a bubble and going “financialization” of real estate is serious, a considerable number of government financing platforms are under great pressure to pay debts, and the debt default ratio of some large and medium-sized enterprises is rising, which aggravates the credit risk of banking institutions. Some small and medium-sized financial institutions are facing a more severe situation. It is necessary to urge banking institutions to do a solid asset classification, increase the provision and make provision, and ensure that non-performing assets can be disposed of more quickly.

第二,严密防范影子银行死灰复燃。我国高风险影子银行与国外不同,具有典型的“体系内”和“类信贷”特征。经过整治后,我国影子银行规模已较历史峰值压降20万亿元,但存量规模依然较大,稍有不慎就极易反弹回潮。要防止金融机构再次通过交叉性金融产品无序加杠杆,对各种“类信贷”新花样必须遏制在初期阶段。要认真落实资管新规,确保存量资管产品整治任务顺利完成。

Second, strictly guard against the resurgence of shadow banking. Different from foreign countries, China's high-risk shadow banking has typical characteristics of "within-system" and "credit-like". After rectification, the scale of shadow banking in China has dropped by 20 trillion yuan compared with the historical peak, but the stock is still large in scale, and it is easy to rebound and regain its momentum if even a slight carelessness creeps in. In order to prevent financial institutions from adding leverage through cross-cutting financial products again, all kinds of new tricks of "credit-like" (products) must be contained in the initial stage. We shall conscientiously implement the new asset management regulations to ensure the smooth completion of the rectification task of existing asset management products.

第三,坚决整治各类非法公开发行证券行为。金融市场目前仍然存在大量名为“私募”实为“公募”的各类产品。过往的非法集资案件,许多实质上属于非法公开发行证券。这些产品参与投资的人数都突破200人的限制,发行对象实际上面向不特定的投资者,对市场、社会和人民群众造成严重损害。一旦发现“假私募、真公募”,应依法予以严惩,并按欺诈发行、财务造假或虚假披露追究发行人等相关方的法律责任。

Third, resolutely rectify all kinds of illegal public offering of securities. There are still a large number of products called "private placement" which are actually "public offering" in the financial market. In the past, many illegal fund-raising cases were actually illegal public offerings of securities. The number of people participating in the investment of these products exceeded the limit of 200, and the targeted investors were in fact for unspecified investors, causing serious damage to the market, society, and the people. Once "de facto public offering in the name of (false) private placement " is found, it shall be severely punished according to law, and the legal responsibility of the issuer and other related parties shall be investigated and punished for fraudulent issuance, financial fraud, or false disclosure accordingly.

第四,切实防范金融衍生品投资风险。在前期发生风险的金融衍生品案例中,有大量个人投资者参与投资。从成熟金融市场看,参与金融衍生品投资的主要是机构投资者,非常不适合个人投资理财。道理在于,受不可控制甚至不可预测的多种因素影响,金融衍生品价格波动很大,对投资者的专业水平和风险承受能力具有很高要求。普通个人投资者参与其中,无异于变相赌博,损失的结果早已注定。那些炒作外汇、黄金及其他商品期货的人很难有机会发家致富,正像押注房价永远不会下跌的人最终会付出沉重代价一样。

Fourth, effectively guard against the investment risks of financial derivatives. In the case of financial derivatives where risks have exploded, a large number of individual investors participated in the investment. From the perspective of mature financial markets, institutional investors are mainly involved in financial derivatives investment, which is not suitable for individual investors. The reason is that due to uncontrollable or even unpredictable factors, the price of financial derivatives fluctuates greatly, which requires investors' professional level and risk tolerance. The participation of ordinary individual investors is tantamount to gambling, and the result of loss is already predetermined. Those who speculate on foreign exchange, gold, and other commodity futures can hardly get rich, just as those who bet that house prices will never fall will eventually pay a heavy price.

第五,时刻警惕各种变换花样的“庞氏骗局”。当下,各种以高息回报为诱饵,打着所谓的金融科技、互联网金融等旗号的骗局层出不穷,其实质都是击鼓传花式的非法集资活动。大家一定要牢记,天上不会掉馅饼,宣扬“保本高收益”就是金融诈骗。要自觉提高警惕,增强风险防范意识和识别能力,远离各类非法金融活动。

Fifth, always be alert to all kinds of "Ponzi schemes". At present, all kinds of scams, which lure victims by high-interest returns and under the banner of so-called financial technology and internet finance, are emerging one after another, and their essence is passing-on-the-risk illegal fund-raising activities. Everyone must keep in mind that no pie drops from the sky, and the propaganda of "high-return guarantees" is financial fraud. We shall consciously be vigilant, enhance risk prevention awareness and the capabilities of identifying risks and stay away from all kinds of illegal financial activities.

希望出席论坛的嘉宾和业内同仁们在就高深问题发表真知灼见之余,也能不厌其烦地宣传这些最基本的金融常识。

I hope that the guests attending this (Lujiazui) forum and colleagues in the (financial) industry will not only express their insights on big issues but also take pains to publicize these basic common senses in finance.

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Part III

Below is the main content of the speech by Yi Huiman, Chairman of the China Securities Regulatory Commission.

很高兴再次来到陆家嘴论坛。这次论坛以“全球大变局下的中国金融改革与开放”为主题,很有现实意义。当前,世界经济格局正在发生深刻变革,疫情发展还充满不确定性,主要发达经济体实施大规模财政刺激和宽松货币政策,一定程度上稳定了市场信心,扭转了经济下滑颓势,但也带来了流动性泛滥、资产价格大幅波动、国际金融市场脆弱性上升等问题。贸易保护主义抬头,全球产业链供应链受到冲击。在此背景下,各国更加重视科技创新在经济转型中的关键作用,积极培育经济长期健康发展新动能。为应对疫情冲击、实现经济高质量发展,中国政府深入推进供给侧结构性改革,加快实施创新驱动发展战略,努力推动科技、资本与实体经济高水平循环,这对有效发挥资本市场功能作用提出了新的更高要求。下面,我重点围绕科创板改革等相关问题谈几点认识。

It's a pleasure to come to Lujiazui Forum again. The theme of this forum is "China's financial reform and opening up amid great changes in the world", which is of great practical significance. At present, the world economic structure is undergoing profound changes, and the development of COVID-19 is still full of uncertainties. Major developed economies have implemented large-scale fiscal stimulus and loose monetary policies, which have stabilized market confidence to a certain extent and reversed the economic downturn. However, they have also brought about problems such as excessive liquidity, sharp fluctuations in asset prices, and the rising fragility of international financial markets. Trade protectionism is on the rise, and the global industrial chain and supply chain is impacted. In this context, countries pay more attention to the key role of scientific and technological innovation in economic transformation, and actively cultivate new energy for long-term healthy economic development. In order to cope with the impact of COVID-19 and achieve high-quality economic development, the Chinese government has deepened the supply-side structural reform, accelerated the implementation of the innovation-driven development strategy, and strived to promote the high-level circulation of science and technology, capital, and the real economy, which put forward new and higher requirements for effectively exerting the functions of the capital market. Below, I will focus on some issues related to the reform of Shanghai Stock Exchange STAR Market.

两年前的陆家嘴论坛上,科创板正式开板。两年来,在党中央、国务院的坚强领导下,在有关方面的大力支持下,我们着眼于落实创新驱动发展战略,着眼于完善资本市场基础制度,坚持“建制度、不干预、零容忍”的工作方针,坚持市场化法治化国际化的改革理念,把握好尊重注册制基本内涵、借鉴国际最佳实践、体现中国特色和发展阶段三个原则,推动设立科创板并试点注册制这项重大改革平稳落地。从目前的情况看,改革整体效果较好,符合预期。

Two years ago, the STAR Market officially opened at the Lujiazui Forum. In the past two years, under the strong leadership of the CPC Central Committee and the State Council and with the strong support of relevant parties, we have focused on implementing the innovation-driven development strategy, focusing on improving the fundamental system of the capital market, adhering to the working principle of "building the system, non-intervention, zero tolerance", adhering to the reform concept of marketization, legalization, and internationalization, adhering to the three principles of respecting the fundamental connotation of the registration-based IPO system, learning from international best practices, and embodying Chinese characteristics and development stages, and promoting the smooth establishment and implementation of the STAR Market and piloting the registration-based IPO system. From the current situation, the overall effect of the reform is good, in line with expectations.

一是支持“硬科技”的示范效应初步显现。截至5月底,科创板上市公司282家,总市值近4.1万亿元。科创板IPO融资3615亿元,超过同期A股IPO融资总额的四成。2020年,科创板公司研发投入与营业收入之比的中位数为9%,研发人员占公司人员总数的比重平均为28.6%,平均拥有发明专利104项,均高于其他板块。科创板集聚了一批集成电路、生物医药、高端装备制造等领域的科创企业,“硬科技”成色逐步显现。2020年,科创板上市公司净利润同比增长59%,明显高于全市场整体水平。

First, the demonstration effect of supporting "hard technology" has become clear. By the end of May, there were 282 listed companies in the STAR Market with a total market valuation of nearly 4.1 trillion yuan. IPOs in the STAR Market raised 361.5 billion yuan, taking over 40% of China’s total A-share IPO financing in the same period. In 2020, the median ratio of R&D investment to operating income in the STAR Market is 9%, and R&D personnel accounts for an average of 28.6% of the total number of employees, with an average of 104 invention patents, which are higher than other markets or boards in China’s stock exchanges. The STAR Market has gathered a number of science and technology enterprises in the fields of integrated circuits, biomedicine, and high-end equipment manufacturing, and the color in "hard technology" has gradually become clear. In 2020, the net profit of listed companies in the STAR Market increased by 59% year on year, which was significantly higher than the overall market.

二是改革的“试验田”作用得到较好发挥。科创板试点注册制作为增量改革的重大探索,坚持以信息披露为核心,在发行、上市、交易、退市、再融资、并购重组等方面进行了一系列制度创新,形成了可复制可推广的经验,为创业板等存量市场改革提供了有益借鉴。例如,设置了多元包容的上市标准,已有19家未盈利企业在科创板上市,特殊股权架构企业和红筹企业也成功登陆科创板,进一步激发了市场活力。再如,科创板大幅放宽了股权激励的实施条件,已有116家公司推出股权激励计划,约占科创板公司总数的41%,有效调动了科技人才的积极性和创造性。

Second, the role of being the "experimental field" for reform has been brought into full play. The registration-based IPO system piloted in the STAR Market’s is a major exploration of incremental reform, insisting on information disclosure at the core, and has carried out a series of institutional innovations in issues, listing, trading, delisting, refinancing, mergers and acquisitions, etc., establishing practices that can be replicated and promoted, and providing a useful reference for the reform of stock markets such as the Growth Enterprise Market (on the Shenzhen Stock Exchange). For example, diversified, inclusive listing standards have been set. 19 unprofitable enterprises have been listed in the STAR Market, and special equity structure enterprises and red-chip enterprises have been listed in the STAR Market, further stimulating market vitality. For another example, the STAR Market has greatly relaxed the implementation conditions of stock incentive compensations, and 116 companies have launched stock incentive compensation plans, accounting for about 41% of the total number of companies in the STAR Market, effectively mobilizing the enthusiasm and creativity of scientific and technological talents.

三是市场运行总体平稳。两年来,科创板主要指标运行平稳,市场流动性水平与其板块定位、投资者适当性、交易制度安排等基本适配。从换手率看,今年前5个月,科创板日均整体换手率为2.56%,高于同期主板、创业板换手率水平。从定价效率看,科创板放宽了涨跌幅限制,优化了融资融券安排,市场博弈更为充分,有利于加快均衡价格形成,与此同时,“炒新”现象明显减少。科创板公司上市后在公司治理和持续信息披露等方面也初步经受住了市场的检验。

Third, the STAR Market is generally stable. In the past two years, the main indicators have been running smoothly, and the market liquidity has been basically in line with the positioning of the STAR Market, investor suitability, and the arrangement of the trading system. In terms of turnover rate, in the first five months of this year, the average daily turnover rate of the STAR Market was 2.56%, which was higher than that of the main board and Growth Enterprise Market in the same period. From the perspective of pricing efficiency, the STAR Market has relaxed the price limit, optimized the margin financing and securities lending arrangements, and the competition is more sufficient, which is conducive to accelerating the formation of equilibrium prices. At the same time, the phenomenon of "speculating on new stocks" has been significantly reduced. After the listing in the STAR Market, the companies also withstood the test of the market in terms of corporate governance and continuous information disclosure.

随着改革的持续推进,以信息披露为核心的注册制理念日益深入人心,市场主体的归位尽责意识明显增强,优胜劣汰机制进一步健全,市场法治供给取得突破性进展,投资者保护渠道更加畅通,市场预期明显稳定,市场整体生态呈现积极向好变化。我们也清醒地认识到,设立科创板并试点注册制具有开创性和突破性,各项制度安排还需要在实践中不断发展完善,改革中出现一些新情况新问题是科创板走向成熟必然要经历的。我们要保持改革定力,坚守“硬科技”定位,进一步完善相关规则,持续提升科创板服务实体经济质效,持之以恒,久久为功。

With the continuous advancement of reform, the concept of a registration-based IPO system with information disclosure at the core takes increasingly firm roots in the minds of the people, the sense of due diligence of the market participants has grown significantly, the mechanism of the prosperity of good and the elimnation of bad companies has been further improved, the supply of rule of law in the market has made breakthroughs, the channels for investor protection have become more smooth, the expectation of the market has been positively stablized, and the overall market ecology has shown positive changes. We are also soberly aware that the establishment of the STAR Market and the pilot of the registration-based IPO system are groundbreaking and breakthrough, and various institutional arrangements need to be continuously developed and improved in practice. Some new situations and new problems in the reform are inevitable for the STAR Market, which will have to go through them as it matures. We shall keep the determination of reforms, stick to its positioning of (listing companies in) "hard technology", further improve relevant rules, and continuously improve the quality and efficiency of the STAR Market’s service to the real economy.

一直以来,社会各方面对资本市场高质量发展寄予厚望,给予了关心支持,提出了很多建设性意见。借此机会,我就近期市场关注的几个问题,同大家做个交流。

All along, all sectors of society have placed high hopes on the high-quality development of the capital market, given care and support, and put forward many constructive suggestions. I would like to take this opportunity to exchange views with you on some recent market concerns.

关于科学合理保持IPO常态化的问题。最近,有观点认为IPO发行有所收紧。我们认为,IPO发行既没有收紧,也没有放松;当然在发行节奏上,需要综合考虑市场承受力、流动性环境以及一二级市场的协调发展,积极创造符合市场预期的新股发行生态。从数据看,近三年IPO数量均保持较快增长,今年前5个月,IPO公司196家,合计融资超过1500亿元,分别同比增长111%和37%。应该说,IPO继续保持了常态化发行,而且增速还不慢。为什么一些市场主体会有收紧的感觉呢?可能有几个方面的因素:一是落实新证券法的要求,对中介机构的责任压得更实了;二是加强股东信息披露监管,明确了穿透核查等相关要求;三是按照实质重于形式的原则,完善了科创属性评价体系,强化了对“硬科技”要求的综合研判。这么做的考虑,主要是为全市场稳步推进注册制改革创造条件,也是处理好注册制改革与提高上市公司质量关系的应有之义,同时也有利于防止资本无序扩张,防范板块套利,维护公开公平公正的发行秩序。

On the scientific and reasonable normalization of IPOs. Recently, there is a view that IPOs have been tightened. We believe that IPOs have neither tightened nor relaxed; Of course, in terms of the frequency of new listings, it is necessary to comprehensively consider the market’s acceptance, liquidity environment, and the coordinated development of the primary and secondary markets, and actively create a new share issuance ecology that meets market expectations. According to the data, the number of IPOs has maintained rapid growth in the past three years. In the first five months of this year, there were 196 IPO companies, with total financing of more than 150 billion yuan, up 111% and 37% respectively. It should be said that IPOs continue to be normal, and their growth rate is not slow. Why do some market players feel there is a slowing down of IPOs? There may be several factors: First, the implementation of the requirements of the new securities law has put more pressure on the responsibilities of intermediaries; The second is we strengthened the supervision of shareholders' information disclosure and clarified relevant requirements such as the verification of the shareholders. Third, according to the principle that substance is more important than form, the evaluation system of the science and technology attributes (of companies attempting to list) has been improved, and the comprehensive judgment on the requirements of "hard technology" has been strengthened. This consideration is mainly to create conditions for the whole market to steadily push forward the reform of the registration-based IPO system, and also to properly manage the relationship between the reform of the registration-based IPO system and the improvement of the quality of listed companies. At the same time, it is also conducive to preventing the disorderly expansion of capital, preventing the arbitrage between different markets/boards (within China’s stock market), and maintaining an open, fair, and just order of IPOs.

关于如何看待企业赴境外上市的问题。一直以来,我们对企业选择上市地持开放态度。选择合适的上市地是企业根据自身发展需要作出的自主选择。一些企业愿意到境外上市,一些赴境外上市的企业愿意回归,有来有去是一种正常现象,我们总体都持支持态度。需要强调的是,企业不论在哪个市场上市,都要遵守当地的法律法规,都要树立公众公司的意识,敬畏法治,敬畏投资者。全球各监管机构也需要进一步加强相互之间的执法合作,共同为市场提供良好的监管预期和环境,共同打击违法违规行为。同时,我们将切实处理好开放与安全的关系,企业赴境外上市的前提,是要符合境内相关法律法规和监管要求。

How to see enterprises going public overseas? We have always been open to the companies’ (own) choice of their listing places. Choosing a suitable listing place is an independent choice made by enterprises according to their own development needs. Some enterprises are willing to go public overseas, and some enterprises that go public overseas are willing to return. It is a normal phenomenon to come and go, and we are generally supportive. It should be emphasized that no matter which market the enterprise is listed on, it must abide by the local laws and regulations, establish its awareness of being a publicly-traded company, and respect the rule of law and investors. Regulators around the world also need to further strengthen law enforcement cooperation with each other, jointly provide a good regulatory expectation and environment for the market, and jointly crack down on illegal activities. At the same time, we will effectively manage the relationship between openness and security, and the premise for enterprises to go public overseas is to comply with relevant domestic laws, administrative regulations, and regulatory requirements.

关于更好发挥商品期货功能、对冲价格风险问题。去年四季度以来,在全球流动性过剩、经济复苏不平衡、供需缺口扩大等多种因素的共同推动下,部分大宗商品价格出现持续上涨,总体看期货价格与现货价格同向而行,但期货价格涨幅小于现货。同时,相关大宗商品期货品种的价格发现、风险管理功能得到较好发挥,境内一批产业企业积极利用原油、螺纹钢、铁矿石、棉花等品种的期货期权工具,有效对冲原材料价格上涨风险,对稳定企业生产经营取得了较好的效果。需要指出的是,由于多方面原因,一些大宗商品国际贸易的定价基准,还主要依赖于国际现货指数和场外市场报价。在这里,我们呼吁相关国际机构,建立更加严谨科学的指数编制机制,提高报价的透明度和约束力,共同提高大宗商品价格发现的效率,以更好维护全球产业链供应链的稳定和安全。

On giving full play to the function of commodity futures and hedging price risks. Since the fourth quarter of last year, driven by various factors such as global excess liquidity, unbalanced economic recovery, and widening gap between supply and demand, some commodity prices have continued to rise. Generally speaking, futures prices go in the same direction as spot prices, but the increase of futures prices is smaller than spot prices. At the same time, the price discovery and risk management functions of related commodity futures varieties have been brought into full play, and a number of domestic industrial enterprises have actively used futures option tools of crude oil, rebar, iron ore, cotton and other varieties to effectively hedge the risk of rising raw material prices, which has achieved good results in stabilizing the production and operation of the enterprises. It should be pointed out that due to various reasons, the pricing benchmark of some bulk commodities in international trade mainly depends on the international spot index and over-the-counter market quotation. Here, we call on relevant international institutions to establish a more rigorous and scientific index compilation mechanism, improve the transparency and binding force of quotations, and jointly improve the efficiency of commodity price discovery, so as to better maintain the stability and security of the global industrial chain and supply chain.

中国正处在新一轮科技革命、产业变革与转变发展方式的历史交汇期。上海既是国际金融中心,也是我国重要的科创中心,在促进科技与金融融合发展方面有着独特优势。证监会将认真贯彻落实党中央、国务院关于推进上海国际金融中心建设、支持浦东新区高水平改革开放等一系列重大决策部署,继续从要素市场建设、支持行业机构做优做强、优化金融法治环境等方面积极参与。继续发挥好科创板改革先行先试的示范引领作用,丰富股债融资工具和金融期货品种,支持行业机构在上海落户展业,进一步完善便利境外投资者投资中国资本市场的制度机制,加快建设更高水平的资本市场法治诚信示范区,为上海“五个中心”建设和实现高质量发展贡献更大力量。

China is at the historical intersection of a new round of scientific and technological revolution, industrial transformation and transformation of development model. Shanghai is not only an international financial center, but also an important science and technology innovation center in China, which has unique advantages in promoting the integration of science and technology and finance. The China Securities Regulatory Commission will conscientiously implement a series of major decision-making arrangements made by the CPC Central Committee and the State Council on promoting the building Shanghai into an international financial center and supporting the high-level reform and opening up of Pudong New Area, and continue to actively participate in the building of factor markets, supporting financial industry institutions to become better and stronger, and optimizing the financial legal environment. We will continue to enable the STAR Market to play a demonstrative role in leading reforms, enrich the variety of stock and bond financing instruments and financial futures, support industry institutions to settle in Shanghai and expand business, further improve the institutional mechanism to facilitate foreign investors to invest in China's capital market, speed up the construction of a higher-level demonstration zone of rule of law and integrity in the capital market, and make greater contributions to the construction of Shanghai's ("five centers" )in the economy, finance, trade, shipping, and scientific and technological innovation) and its realization of high-quality development.