By Sheng Hetai, General Manager of China Export & Credit Insurance Corporation
Financial instruments such as import and export credit and export credit insurance are the means of promoting foreign trade stipulated by the laws of the mainland and are an important part of the macroeconomic regulation and control financial policy. At present, the mainland's foreign trade has shifted from high-speed growth to high-quality development, and it is more necessary for export credit insurance to play a greater role in helping the transformation and upgrading of foreign trade and promoting the construction of a trade power.
General Secretary Xi Jinping's important speech at the Central Financial Work Conference systematically expounded for the first time the basic essence of the road of financial development with Chinese characteristics and the main connotation of the modern financial system with Chinese characteristics, focusing on comprehensively promoting the great rejuvenation of the Chinese nation with Chinese-style modernization, raising the banner for orientation, and planning the layout of financial work, which is the fundamental principle of doing a good job in financial work in the new era and new journey, and is an important action guide for export credit insurance to better serve the high-quality development of the mainland's foreign trade and open economy.
Deeply understand General Secretary Xi Jinping's important expositions on financial work, and deeply understand the importance of financial support for the high-quality development of trade
Since the 18th National Congress of the Communist Party of China, General Secretary Xi Jinping has always adhered to the basic principles of Marxism to observe, grasp and lead finance, and has made a series of important expositions on financial work, pointing out the right direction for the financial industry to better serve the high-quality development of trade.
Finance is an important force to boost foreign trade and drive economic growth
Finance is the lifeblood of the national economy and an important part of the country's core competitiveness. General Secretary Xi Jinping pointed out that "finance is the core of the modern economy. To maintain steady and healthy economic development, we must do a good job in finance." The Central Financial Work Conference emphasized that "finance should provide high-quality services for economic and social development".
At present, the mainland economy has entered a stage of high-quality development, with outstanding institutional advantages, a solid material foundation, and continuous maintenance of long-term positive fundamentals, with a GDP of more than 126 trillion yuan in 2023, an increase of 5.2% over the previous year. Throughout the history of the development of global powers, foreign trade is an important force that determines the road to economic take-off and power. Foreign trade is an important part of the mainland's open economy and one of the "troikas" of economic growth.
In recent years, the mainland's exports of goods have jumped to more than 14% of the world's total, and the total trade in goods and services ranks first in the world, making the mainland the world's largest trading country. In this process, the mainland's financial industry has continued to improve its support and guarantee for the cross-border flow of goods, services, technologies and other factors, and has become an important force in boosting foreign trade and driving economic growth. In 2023, with the expected decline in global trade, mainland exports achieved a slight increase, and their share of the global market remained stable.
Finance is a strong support for serving the main body of the foreign trade market
The economy is the body, finance is the blood, and the two are symbiotic and co-prosperous. General Secretary Xi Jinping once again emphasized at the Central Financial Work Conference that "adhere to the fundamental purpose of financial services for the real economy". The mainland's 14th Five-Year Plan and the Outline of the Long-Range Objectives Through 2035 also emphasize the need to build an institutional mechanism for financial support to effectively support the real economy. The mainland's financial industry will support the high-quality development of foreign trade as an important focus to serve the real economy, focus on the needs of more than 600,000 import and export enterprises with import and export performance in the mainland, continue to play the role of financial bloodline, continuously enhance financial supply capacity, accurately strengthen financial support for key areas and weak links of foreign trade, help stabilize and strengthen the main body of the mainland's foreign trade market, and provide important support for expanding high-level opening up.
Finance is the key guarantee for the smooth domestic and international dual circulation of foreign trade
Accelerating the construction of a new development pattern is a systemic and in-depth change that has a bearing on the overall situation. General Secretary Xi Jinping stressed that "building a new development pattern is an open domestic and international dual circulation, not a closed domestic single circulation". As an important carrier for the cross-border flow of goods, services and various factors, foreign trade is an important means to link domestic and international markets and resources, and is a key hub for smooth domestic and international dual circulation. Improving the resilience and security of industrial and supply chains is an important foundation for smooth domestic and international dual circulation. Over the years, the mainland's financial industry has continued to enhance the diversity and adaptability of products and services, continued to improve the product and service systems such as payment and settlement, exchange rate hedging, trade financing and credit insurance, continued to improve the comprehensive financial service guarantee capacity of the mainland's industrial and supply chains, and strived to provide all-round financial support for promoting the integration of domestic and foreign trade and accelerating the construction of a new development pattern.
Finance is an effective tool for macroeconomic policy adjustment of foreign trade
The functions of finance, such as capital financing, asset allocation, price discovery and risk management, play an important role in optimizing the allocation of social resources and solving problems such as unbalanced and insufficient development. Chapter 9 of the Foreign Trade Law of the People's Republic of China, "Foreign Trade Promotion", clearly stipulates that "the State shall develop foreign trade through import and export credit, export credit insurance, export tax rebates and other ways to promote foreign trade. "Financial instruments such as import and export credit and export credit insurance, as statutory means of promoting foreign trade, are an important part of macroeconomic regulation and control financial policies. After the outbreak of the new crown epidemic in 2020, General Secretary Xi Jinping has made important arrangements for financial support to stabilize foreign trade three times, requiring "increasing trade financing support, giving full play to the role of export credit insurance", "giving full play to the role of export credit insurance", and "making full use of compliant foreign trade policy tools such as export credit insurance to expand export credit". At the government level, a series of policies to stabilize foreign trade have been intensively introduced, giving full play to the counter-cyclical and cross-cyclical adjustment role of policy-based financial instruments such as export credit insurance and export credit, effectively transmitting and implementing macroeconomic regulation and control policy objectives, and striving to stabilize foreign trade and the economy.
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Article source丨Tsinghua Financial Review, Issue 123, February 2024
This article is edited by Zhou Mingyi
Editor-in-charge丨Ding Kaiyan, Lan Yinfan
Preliminary trial丨Xu Lanying
Final Review丨Zhang Wei
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