"Economic Development" Zhang Xiaojing: Anchoring the Goal of Financial Power and Promoting High-quality Financial Development - Theoretical Framework and Practical Path

Zhang Xiaojing: Anchoring the goal of becoming a financial power and promoting high-quality financial development: a theoretical framework and a practical path

economic development

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At the Central Financial Work Conference held at the end of October 2023, General Secretary Xi Jinping put forward the goal of "accelerating the construction of a financial power", emphasizing that he would unswervingly follow the path of financial development with Chinese characteristics, and contribute to the construction of a strong country and the great cause of national rejuvenation with high-quality financial development, providing a fundamental follow and action guide for promoting high-quality financial development in the new era and new journey. At the beginning of 2024, General Secretary Xi Jinping delivered an important speech at the opening ceremony of the seminar on promoting high-quality financial development for major leading cadres at the provincial and ministerial levels, emphasizing that the path of financial development with Chinese characteristics not only follows the objective laws of modern financial development, but also has distinctive characteristics suitable for the national conditions of the mainland, which is fundamentally different from the Western financial model. On this basis, General Secretary Xi Jinping further explained the rich connotation of a financial power, clearly put forward the key core financial elements of a financial power, and pointed out the direction for accelerating the construction of a financial power and promoting high-quality financial development.

Accelerating the construction of a financial power is a major goal and task for the development of the financial industry in the new era and new journey. Theoretically profoundly grasping the strategic plan of building a financial power, and striving to explore the path of building a financial power in practice, is not only the fundamental requirement for doing a good job in financial work in the new era, but also the basic core of taking the road of financial development with Chinese characteristics, promoting high-quality financial development, and building China's independent financial knowledge system. Based on the relevant important expositions of General Secretary Xi Jinping, this paper attempts to put forward the theoretical framework of financial power and explore the practical path of financial power based on the understanding of the process of world modernization, the rise and fall of great powers, and the development of modern finance.

1. The theoretical framework of a financial powerhouse

"Accelerating the construction of a financial power" was first proposed by the 2023 Central Financial Work Conference, which reflects the CPC Central Committee's profound grasp of the rise and fall of financial development related to the rise and fall of major countries, highlights the dialectical relationship between financial power and Chinese-style modernization, and draws a grand blueprint for China's future financial development. However, from an academic point of view, the literature on financial powers is lackluster, and neither general economics nor modern finance is covered. This paper attempts to put forward a theoretical analysis framework for financial power from three aspects: historical investigation, theoretical traceability and strategic thinking.

(1) Financial development is related to the rise and fall of major countries

Finance is the lifeblood of the national economy and an important part of the country's core competitiveness. The rise and fall of a country is closely linked to finance. A typical argument is that there has been a great divergence between China and the West in modern times, and the reasons may be manifold, but a rather competitive hypothesis is that the great financial divergence has led to the great divergence of the economy (Zhang Xiaojing and Wang Qing, 2023).

Financial power generally has two meanings: one refers to the strength of finance itself, that is, from the perspective of various indicators, its financial system is in a strong position in the world, and the other is that a country's financial development is enough to support the strength of a country's national strength, that is, finance helps build a strong country. These two aspects complement each other and are indispensable, and they are two sides of the same coin. Historically, the only countries that have truly been financial powerhouses have been the Netherlands, the United Kingdom, and the United States. On the one hand, it is because these three countries have become world powers (or even hegemons for a while), and on the other hand, strong financial support is indispensable in the process of their rise as great powers. The financial evolution and hegemonic succession of these three countries perfectly illustrate the thesis that financial development is related to the rise and fall of great powers.

As a world hegemon in the middle of the 17th century (1625-1675), the Netherlands is because of the economic miracle it created in the 16th and 17th centuries, especially the aquaculture industry represented by herring and the agricultural production, textile industry, and shipbuilding industry that rely on land reclamation are very developed, and the shipping industry has been developed all over the world, and has the reputation of "sea coachman". Not only does the Netherlands have a worldwide influence in industry and trade, but its financial innovation is also world-renowned and has played a key role in its rise. For example, Tracy (1985) argues that it was the Habsburgs of Spain, in order to further exploit the economic resources of the Low Countries, that forced the Netherlands to accept a system of public loans, which led to the Dutch version of the "financial revolution" defined by Dixon. As a result, the Netherlands was able to continue to finance its war against Spain by issuing low-interest bonds through the public lending system during the Eighty Years' War with Spain. In addition to the public bond market to finance the Dutch Revolution, the capital market also provided the Dutch with abundant capital for foreign trade and colonial expansion.

Britain apparently benefited from the Industrial Revolution, which in turn dates back to the Financial Revolution. Hicks argues that it was the "financial revolution" that preceded the "Industrial Revolution" that provided the necessary financial basis for Britain's war of hegemony and industrial development. After the success of the Glorious Revolution in 1688, England welcomed William III, a monarch from the Netherlands. He was joined by Dutch bankers, financial practitioners, and the "genetic sequence of Dutch finance" (Gozman, 2017). The Glorious Revolution and the Bill of Rights reshaped the British polity, and the credible promises it brought with it, laid the institutional foundation for the financial revolution that followed. The establishment and solidity of parliament ensured that the Government could not formulate fiscal policies that infringed on private property rights. The Bank of England, which he led the establishment of in 1694, became the center and stabilizer of the expansion of the British financial system while further checking and balancing government finances. These factors led to the successful "Dutchization" of the United Kingdom: its public credit market stabilized after an initial period of volatility, and by thirty years after the Glorious Revolution, interest rates on British government bonds were almost equal to those of the Netherlands. This strong securitization capability enabled Britain to raise more money to grow its national power and even finance the war effort. It can be said that one of the key factors in the final victory of Britain over France in the 18th century in the process of Anglo-French hegemony was that Britain had more developed financial technology. The establishment of the Bank of England and the subsequent establishment of the modern commercial banking system provided financial support for the first industrial revolution, which enabled large-scale industrial development to be realized quickly after the creation of iconic inventions such as the textile machine and the steam engine.

In the process of the rise of its hegemony, the key role of finance can also be seen everywhere in the United States. The financing of major wars such as the Civil War, World War I, and World War II made the issuance, circulation, and trading of Treasury bonds the starting point for the formation of the Wall Street-centered financial system in the United States, and correspondingly, the rise, development, and expansion of Wall Street promoted the development of the second industrial revolution in the United States. Joint-stock companies and stock exchanges were revived in the Netherlands and England in the 16th century. In 1720, the British "South Sea Company" bubble and the French "Mississippi Company" stock bubble burst one after another, resulting in the collapse of the French stock market, while the British stock market was silent due to the passage of the Bubble Act of 1720 by Parliament, which made it almost impossible for any new company to issue shares to the public, and this situation did not end until 1856, when Parliament passed the "Company Limited Act". It is precisely for this reason that Britain and other European countries left the opportunity for the great development of the stock market to the United States in the first half of the 18th century, so that by the time Britain reopened the stock market in 1856, the American capital market was far ahead, including the engine of the industrial revolution had also shifted from the United Kingdom to the United States (Chen Zhiwu, 2022). This also gives the financial reasons why the vitality and development of the British economy began to lag significantly behind that of the United States during the Second Industrial Revolution. As far as "financial technology" is concerned, the UK learns from the Netherlands, and the US learns from Western Europe. Since the founding of the United States, it has first inherited the traditional financial industry of Western Europe, and then gradually pushed the capital market, consumer credit, insurance, and investment banking to new highs. As a result, the capital support for enterprise development has been enriched, and the risk of entrepreneurship and innovation has been dispersed among thousands of investors, laying the foundation for the United States to become an innovative country.

(2) Theoretical tracing of financial powers

Financial power is not found in the so-called mainstream literature of the West, and it is rarely seen in modern finance textbooks, but there are still some related discussions, such as "financial hegemony", "monetary hegemony", "financial structural power", "exchange rate weapons", "financial national policy", etc. It is along this line that this paper attempts to theoretically trace the origins of international financial power, financial weapons and financial state policies, and financial expansion in the system accumulation cycle, and then discusses the potential benefits of a country's financial strength, as well as the complex relationship between financial expansion (or financialization) and hegemonic succession.

1. International financial power

In the nearly 100 years of the development of the discipline of international relations, financial power has also been neglected by mainstream theories and empirical research for a long time. It was only in the 70s of the 20th century that the birth of International Political Economy (IPE), especially marked by the publication of Susan Strange's Introduction to International Political Economy: The State and the Market, that financial structural power entered the academic field and provided theoretical support for explaining the transcendent influence of a country's finance, such as financial hegemony.

Strange (1990) innovated by including "financial structural power" among the four "structural powers" that maintain international production relations. Strange divides power in the global political economy into two types – relational power and structural power. Relational power is "the power that enables A to do what he does not want to do", and structural power is "the power that shapes and determines the political and economic structures of the world, in which other state apparatus, political institutions, economic enterprises, and (equally important) scientists and other professionals have to operate." In short, structural power is the power to determine the way things are done, the power to structure the framework of relations between countries, between countries and people, or between countries and companies. ”

Strange believes that "wealth, security, freedom, and justice" are the basic values to which human society aspires. Based on the logic of these four value appeals, she proposes four sources of structural power, namely security structure, production structure, financial structure and knowledge structure. These four structures do not exist in isolation, they exert influence in the global political economy by interconnecting them to generate structural power. Financial architecture refers to the sum of the arrangements that govern the availability of credit and all the elements that determine the terms of exchange between currencies. She argues that in economically developed countries, investment is not based on cash accumulated from profits, but on credit creation. This is actually a continuation of the ideas of Schumpeter and Keynes. Thus, once a country gains the trust of other countries in its ability to create credit, i.e., the power to extend credit, it has the capacity to mobilize global resources. After the 70s of the 20th century, the United States completely got rid of the shackles of gold and gained the power to control or abuse the currency of the credit accounting unit. As a result, the United States has gained an advantage in the more lucrative world financial services market and uses this market as an effective source of power to market other industries. Therefore, under the analytical framework of "structural power", the "decline of US hegemony" that most scholars believed at that time was only the decline of the United States in traditional industries, but in fact, the improvement of financial structural power strengthened the power of the United States in the world economy, and the hegemony of the United States was strengthened instead of declining.

Strange's theory of structural power provides a profound analysis of the transcendent influence of finance. However, financial influence is not only reflected in structural power, but also in the form of more basic relational power, institutional power that dominates global governance, and conceptual power as soft power. In this way, international financial power can form an analytical framework from both vertical and horizontal dimensions (see Table 1). The horizontal dimension refers to the four types of international financial power, namely, relational, structural, institutional, and conceptual international financial power. The vertical dimension explores the three constituent elements within a particular type of power, namely strength, willingness, and ability. Strength is a fundamental element, an objective (material or conceptual) source or carrier of international financial power. In practice, willingness is often expressed as a strategic element, that is, a country's willingness to have financial power over a particular type of country is reflected through its macroeconomic policies and strategies. Capability describes the operational element, which is closest to the connotation of international financial power in the narrow sense, which refers to the specific operation mode of the state to conduct power games. The above four types of power and the three constituent elements together form a comprehensive analytical framework on international financial power, which provides important theoretical support for grasping the financial power.

2. Financial weapons and financial national policies

Since the Russia-Ukraine conflict, the financial sanctions and "financial weaponization" of the United States have become well-known. In fact, many years ago, such issues were discussed within the framework of monetary and financial policies.

The so-called financial statecraft, or financial diplomacy strategy, is centered on influencing international capital flows, which is broadly embodied in four areas: securing or restricting capital flows, imposing financial sanctions on non-state entities, underwriting the country's bonds in the event of a currency crisis, and monetary union or dollarization (Steil & Litan, 2006). Broadly speaking, a financial state policy is a country's use of its global financial influence (such as the so-called "international financial power") to exert influence and control over other countries. From this point of view, the theory of financial state policy is a further application and expansion of the theory of international financial power.

Monetary statecraft – as part of a financial state – refers to the effort to manipulate the monetary environment to influence the policies of other countries, a recurring feature of the global economy since World War II. At some critical moments in the past, the United States has taken advantage of the weakness of European and East Asian countries to change the exchange rate of its currencies against the US dollar, in an effort to force its administration and central bank to make policy adjustments. Although the "exchange‐rate weapon" has been more successful than others in some phases, it has always played a key role in international conflicts in which trade imbalances are adjusted (Henning, 2006). Over the past half-century or so, international monetary relations have exhibited a marked cyclical nature. Each cycle begins with relative harmony, then enters a high degree of confrontation in the adjustment of imbalances, and finally reaches a certain degree of reconciliation and enters a new stage of relative harmony. And so on and so forth. Henning divides the past 50 years into five cycles, namely: (1) the collapse of the Bretton Woods system in the early 70s of the 20th century, (2) the resolution of the world reflation conflict at the Bonn Summit in 1978, (3) the Plaza Accord and the Louvre Accord in the mid-80s of the 20th century;( 4) the recession and recovery in the early and mid-90s of the 20th century, and (5) the disputes of the new century. In each cycle, the U.S. government has pressed European and Japanese governments or central banks to take expansionary measures, and has actively encouraged the depreciation of the dollar itself (Henning, 2006). The complete logical chain behind this series of facts is that global imbalances lead to economic conflicts, economic conflicts require policy coordination, and the coordination process is subject to the financial power of the United States, especially the hegemony of currency, and the exchange rate is the key weapon to realize its financial power.

In addition to the exchange rate weapon, there are other financial strategies (or weapons) of financial state: the implementation of dollarization, financial liberalization, dollar swap agreements, and financial sanctions that exclude other countries from the dollar settlement system (SWIFT).

With regard to dollarization, the proponents of the financial policy (Steil & Litan, 2006) have made it very clear that dollarization outside the borders of the United States is in the interests of the United States, and that the United States needs to restart the efforts made by the 106th Congress to promote dollarization, and more urgently the United States should stop implementing the current unrestrained fiscal policy and no longer be indifferent to the future of the dollar. If the Bush administration does not convincingly and resolutely change its worrying long-term budget deficit policy, the world will lose confidence in the dollar as a store of value, and the dollarization process may come to an abrupt halt. Given that neither the euro nor any other currency can replace the dollar, the abrupt halt of dollarization will be even more worrying. The failure of dollarization means not only the failure of the monetary consolidation process, but also the future of more crises and more anti-globalization ideas. They further raised expectations for the future of U.S. financial policy: an enlightened U.S. financial policy would always go hand in hand with these principles. The security of the United States is inseparable from the long-term prosperity, freedom, and rule-based international economic and political order to which all peoples aspire to depend. Given the nature of money and security in the digital age, financial markets are a very important part of this order. The market adapts to and uses national rules for arbitrage, and the method and speed of arbitrage are often not fully anticipated and evaluated by policymakers. The financial state policy is proposed to make this assessment better, so that future financial state policies can be more informed and effective.

The financial state policy clarifies from another angle: if finance is not strong enough, it may become a victim of the financial weapons of major powers.

3. Financial expansion in the system accumulation cycle

Whether it is financial power or financial national policy, more emphasis is placed on the "benefits" of financial strength. But in fact, finance is a double-edged sword, and the negative effects of excessive financialization are also very obvious. Therefore, there are many overlaps and complex causal relationships between the financial (power) cycle and the rise and fall of countries, and any one-way thinking is incomplete or even misleading.

Giovanni Arrigi (2012) identifies and analyzes the four "systemic cycles of" in the history of capitalist expansion based on "financial expansion". accumulation): The first is the Genoese cycle from the 15th to the early 17th century, the second is the Dutch cycle from the late 16th century to the 18th century, the third is the British cycle from the late 18th century to the early 20th century, and the fourth is the American cycle of financial expansion from the 19th century to the present. In each cycle, there is a phase in which finance expands itself by withdrawing from the real economy (e.g., commerce, production, etc.). This stage can be seen as a shift in capital from a particular input-output mix (such as commercial capital or industrial capital) to money capital and financial capital, the latter (i.e., monetary finance capital) which means that capital is seeking greater liquidity, flexibility and freedom of choice for itself. This tendency was already evident in Italy in the 15th century. Braudel (1979) points out that in the second half of the 16th century, Genoa, which was overcapitalized, followed the same path, and the "old aristocracy", which was devoted to lending money to the Catholic kings, gradually moved away from active commercial activity. Amsterdam has gone so far as to repeat the mistake of putting aside the practical benefits of the "warehousing trade" and pursuing the illusory hope of eating and profiting, and even using its money to promote the prosperity of London. Following the Netherlands, Britain repeated this phenomenon in the late 19th and early 20th centuries, when the end of the grand cause of the Industrial Revolution created an oversupply of money capital. American capital embarked on a similar path in the seventies and eighties of the twentieth century.

The beginning of financial expansion and the "withdrawal" from the real sector of the economy can be seen as a "signal crisis" of the dominant accumulation system. It was at this time that the leading institutions of the system's accumulation process began to shift capital more and more from trade and production to financial buying and selling and speculation. This transfer represents a crisis, meaning that it marks a turning point, a decisive moment of critical moment, through which the leading institution of the process of capital accumulation of the system demonstrates its negative judgment on whether surplus capital can continue to profit from its reinvestment in the material expansion of the world economy, and at the same time makes a positive judgment on whether its leadership and dominance can be prolonged in time and space by investing more exclusively in big financial capital. This crisis is a signal of a crisis deep in the system. However, a shift to big finance could temporarily prevent the outbreak of this crisis. In fact, this transformation can do much more: it can turn the end of material expansion into a "wonderful moment" when the promoters and organizers of material expansion can continue to gain wealth and power. It plays this role in all four cycle of system accumulation, but to different degrees and methods (Arrigi, 2022).

From the perspective of the relationship between the capital accumulation system and the power system, the early capital accumulation system was completely based on and subordinate to the power system, but as the accumulation system continued to expand and eventually covered the whole world, they became more and more detached from and dominated the power system. Therefore, in order to successfully pursue power, the government must take the lead not only in the process of state-building and waging war, but also in the process of capital accumulation. The capitalist world economy has changed from a system in which the system of accumulation is entirely based on and subordinate to the system of power, to a system in which the system of power is completely based on and subordinate to the system of accumulation, through a series of cycles of system accumulation, each of which includes a phase of material expansion and a subsequent stage of financial expansion. Among them, financial expansion represents a manifesto that declares not only that a particular stage of development of the capitalist world system has matured, but also that a new one has begun.

From the perspective of Marxist political economy, the law of capital accumulation determines the form of hegemony, and financial expansion and the financial power formed therefrom are subordinate to the law of capital accumulation. This means that the logic of capitalist financial expansion (including the shift from commercial capital and industrial capital to finance capital) is subordinate to the general logic of capital accumulation, which fundamentally explains why the financial development of capitalist society is capital-centric and not otherwise. Piketty (2014) expresses a similar view, that is, the trend of financialization of capital accumulation: capital is never static, at least in the initial stage, it is always accompanied by risk and entrepreneurship, but it is also always transformed into the form of rent after accumulating a large enough amount, which is its mission and its logical end.

Further, the financial expansion in the accumulation cycle of the system and the financialization resulting from the "withdrawal" from the real economy are signs of the maturity of the development stage and the "signal crisis" of the dominant accumulation system, which will be replaced by a new one. The successive financial expansions of the Genoa, Dutch, British, and American cycles can have transcendent global financial influence on the one hand, and on the other hand, they also announce the decline of the old accumulation system and the rise of the new accumulation system (and the new generation of powers that adapt to it).

(3) Financial power and Chinese-style modernization

From the perspective of the modernization process of various countries in the world, finance has played an important role in it. This actually breaks the "veil theory" and "neutral theory" of monetary and financial affairs in neoclassical economics. From the perspective of literature, theoretical analysis and empirical research on the promotion of long-term growth by financial development have also emerged in an endless stream, providing certain theoretical support for financial powers.

1. Financial development and long-term growth

Bagehot emphasized the role of finance in economic development, particularly in facilitating the flow of capital during the industrialization of Britain (Bagehot, 1873). Schumpeter also noted that banks played a large role in financing the innovative activities of entrepreneurs (Schumpeter, 1912). After World War II, Gurley and Shaw promoted groundbreaking research on the relationship between money and finance and economic development. They point out that the role of finance is to convert savings into investment, thereby increasing the level of productive investment in society as a whole (Gurley & Shaw, 1960). Patrick then examines the relationship between financial development and economic growth in less developed countries. The logical correlation is that financial development promotes an increase in the capital stock, which in turn leads to an increase in real output (Patrick, 1966). Gerschenkron's study of the relationship between different financing models and economic development in European industrialization from the mid-19th century to the First World War formed the prototype of comparative finance research (Gerschenkron, 1962). In the 70s of the 20th century, McKinnon and Shaw's theory of financial repression-financial deepening emerged (McKinnon, 1973; They oppose interest rate controls and financial repression, and advocate financial liberalization and financial development as policies to promote economic growth. Financial liberalization is at the heart of Mackinnon-Shaw's theory. They believe that the financial sector, like any sector, can reach equilibrium by relying on the spontaneous forces of the market, known as the Pareto state. Previously, the dominant view was that the financial sector was different from other sectors of the economy and that government intervention was essential for the effective functioning of the financial sector (a view that later Stiglitz still insisted), but they questioned this and argued that government intervention in finance should be minimized. The contribution of the MacKinnong-Shaw model is to establish an analytical framework for the relationship between financial deepening (or financial liberalization) and economic growth. Since the 80s of the 20th century, the emergence of endogenous growth theory has provided a new perspective for the study of the relationship between finance and economic growth. Many scholars have developed endogenous financial growth theories based on endogenous growth theories, and they have introduced factors such as uncertainty (preference shocks, liquidity shocks), asymmetric information (adverse selection, moral hazard), and supervision costs into the model, making a convincing explanation for the endogenous growth of financial intermediaries and financial markets (Zhang, 2022).

On the basis of theoretical and mechanistic analysis, a large number of empirical research literature has also emerged. Early empirical studies have failed to point to a causal link between financial development and economic growth. The first attempt to solve the above problem was King & levine (1993). Through the careful design of indicators (which reflect the degree of financial development) and the control for other growth-related variables, they identified a causal link: that is, the initial level of financial development is a good predictor of subsequent economic growth, capital and productivity growth. However, the study itself has its shortcomings, such as the examination of causality. Rajan & Zingales (1998) argue that if the increase in borrowing in financial markets is due to the expectation of faster growth in the future, then the initial level of financial development may be a leading indicator rather than a cause. One solution to the causal problem is to find an indicator that cannot be affected by economic growth but can measure an aspect of financial development. Roubini & Sala-i-Martin (1995) found that bank reserve ratios meet this requirement. This indicator is largely unaffected by economic growth, but it can be used as a sign of financial repression, which is negatively correlated with economic growth. Rajan & Zingales (1998) takes a different approach, breaking down the relationship between finance and growth. They argue that financial development reduces the cost of external financing and thus promotes growth.

The unique function of finance is that finance can promote long-term growth. According to Merton & Bodie (1995), finance promotes growth by facilitating the spatiotemporal allocation of economic resources under uncertain conditions and improving the efficiency of economic operations. Specifically, due to the functions of finance in payment and settlement, resource mobilization, risk allocation and signal display, it reduces the generalized transaction cost in economic operation and promotes the effective allocation of resources, thereby driving economic growth.

2. Financial power and Chinese modernization

The promotion of long-term growth by financial development proves the inseparable relationship between a country's modernization and financial support from one perspective, and the symbiosis and co-prosperity of economy and finance provides a theoretical basis for grasping the dialectical relationship between financial power and Chinese modernization.

Xi Jinping pointed out: "Financial activity, economic activity, financial stability, economic stability." The economy is prosperous, the finance is prosperous, the economy is strong, the finance is strong. The economy is the body, finance is the blood, and the two are symbiotic and co-prosperous. "From an economic power to an economic power, it will inevitably be accompanied by a large and strong finance. On the one hand, financial activity and economic activity are active, and financial stability and economic stability are stable. To build a financial power, we should adhere to the fundamental purpose of providing financial services to the real economy, and insist on taking risk prevention and control as the eternal theme of financial work. On the other hand, if the economy is prosperous, the financial sector will be prosperous, and if the economy is strong, the financial sector will be strong. China's economy has good fundamentals, strong resilience, great potential and full vitality, laying a solid foundation for the sustained, healthy development and strengthening of the financial industry. A strong economic foundation is the basic prerequisite for building a financial power.

The dialectical relationship between financial power and Chinese modernization is an extension and expansion of the theory of economic and financial symbiosis and co-prosperity. General Secretary Xi Jinping stressed that we should adhere to the idea of a game of chess in economy and finance, conscientiously implement the decisions and arrangements of the Central Financial Work Conference, promote high-quality economic and financial development as a whole, and make new and greater contributions to comprehensively promoting the construction of a strong country and the great cause of national rejuvenation with Chinese-style modernization. On the one hand, the fundamental purpose of building a financial power is to serve China's modernization. Comprehensively promoting the construction of a strong country and the great cause of national rejuvenation with Chinese-style modernization is the biggest politics in the new era. The construction of a financial power is inseparable from the construction of a modern socialist power, and is subordinate to and serves the Chinese modernization. On the other hand, a modern power is inevitably a financial power, and building a modern socialist country in an all-round way is inseparable from the key support of a strong financial system, and the construction of a financial power can only be achieved in the great process of promoting Chinese-style modernization. Chinese-style modernization is the biggest politics, and high-quality development is the last word in the new era. Promoting high-quality financial development and helping China's modernization are the intrinsic requirements of a financial power. As an important part of China's economy, finance must be deeply integrated into the historical process of Chinese-style modernization. The logic of aiming to become a financial power and promoting high-quality financial development is embedded in the general logic of Chinese-style modernization.

Second, the key core financial elements of a financial power

General Secretary Xi Jinping pointed out that the key core financial elements of a financial power are "having a strong currency, a strong central bank, a strong financial institution, a strong international financial center, a strong financial regulation, and a strong financial talent team". These "six strong" are about the understanding of the law of modern financial development, and are the core essence of accelerating the construction of a financial power.

(1) A strong sovereign currency and central bank are the core hallmarks of a strong financial country

A strong sovereign currency is the epitome of a financial power. When a country's currency becomes an international reserve currency, it means that its national credit will become global credit, and the reserve currency country can mobilize global resources to "use it" by issuing its own currency or local currency debt. Nowhere was this more evident than in the era when the U.S. dollar became a credit currency. Further, as reserve currency countries control global credit, their central banks also become quasi-global central banks.

The international gold standard (1870-1914), based on gold and with the British pound as the world currency, was the earliest international monetary system in history. In 1816, Britain began to implement the gold standard, and after 1870, the gold standard was extended to Europe and even the Americas. The international gold standard system made the British pound the world currency, and at its peak, more than 40% of international trade was settled in pounds. Britain led the establishment of the international gold standard, forcing economies to follow the "rules of the monetary system", and the Bank of England became the "lender of last resort". The Bank of England controls the circulation of gold on the international market and the supply of world money by manipulating the discount rate. International monetary policy is essentially set and managed by the Bank of England, which becomes the global central bank.

After World War II, the dollar completely defeated the pound sterling through the Bretton Woods system and became the new monetary hegemon. After the collapse of the Bretton Woods system, the dollar was no longer pegged to gold and became a true credit currency. The decoupling of the US dollar from gold and its own credit to become the dominant currency of the international monetary system is fundamentally different from the British pound pegged to gold and exercising the hegemony of the pound by dominating the international gold standard system. This has brought enormous benefits to the United States, which are difficult to estimate. Because then the national credit of the United States becomes global credit, which can mobilize (or even exchange) global resources by issuing currency or debt.

A strong currency and a strong central bank go hand in hand. On the one hand, a strong currency is a prerequisite for a country's central bank to become a global central bank, and on the other hand, effective management of a country's central bank becomes a guarantee of a strong currency. Historically, the Bank of England has maintained the long-term stability of the value of the British pound, which not only established the monetary hegemony of the British pound, but also helped to enhance the credibility of British government bonds, and the good reputation of currency and government bonds in the international market has laid the foundation for Britain to become a financial power. The pound was stabilized by Elizabeth I in 1560-1561 and never rose or fell since, maintaining its intrinsic value until 1920, or until 1931. It's nothing short of a miracle,...... Of all the currencies in Europe, only the British pound has survived an astonishing 300 years. This long-term stability of the currency is a key factor in the wealth of the United Kingdom. Without a stable currency, there would be no low-interest loans, those who lend money to the monarch would not have a sense of security, would not have confidence in any contracts, and Britain would not have become strong and would not have a financial advantage without loans (Braudel, 1979).

(2) Strong financial institutions and international financial centers are the key to financial power

Financial powers often have a number of systemically important commercial banks, investment banks and insurance companies, as well as a number of highly competitive international financial centers, which attract international investors with their global money markets, capital markets and commodity markets, and have the right to price international financial markets and allocate resources in the world economy. Strong financial institutions and strong international financial centers can be said to be the key to financial power.

In the 17th century, the Netherlands became a maritime hegemon thanks to the Amsterdam exchange bank, the rapid development of the stock market, and the formation of an international financial center. In the late Middle Ages, a number of representative exchanges emerged in Europe, and the Amsterdam Stock Exchange, founded in 1530, is on the books. In 1609, the Dutch founded the world's first central bank, the Amsterdam Exchange Bank. The exchange bank proved to be a reliable depository for the working capital of the commercial community and an efficient clearing house for credit notes, thus creating the necessary financial basis for the development of trade in the Dutch region. Shortly after the establishment of the Dutch East India Company, a thriving secondary market for East India Company shares emerged in Amsterdam, thus contributing to the development of public and private finance in the Netherlands (Fu Jinghui, 2011). The financial revolution marked by private central banks, multinational commercial banks, government bond issuance, and securities trading helped Britain become an empire on which the sun never sets. London became the most influential international financial center at the time, not only as a center for international trade financing, but also as a center for long-term cross-border capital flows. To this day, London remains the world's largest foreign exchange trading center. The United States has the world's largest stock exchange, futures exchange. The U.S. exchange not only leads the innovation of global securities trading, but also becomes an important stage to promote global technological innovation and the development of emerging industries. The Chicago Board of Trade and the Commodity Exchange are also important centers for global commodity futures trading, which play a role as a bellwether for global commodity prices. Wall Street became a symbol of the rise of the American financial empire, and New York became the world's leading financial center. These powerful financial institutions, financial markets, and international financial centers are important levers for the United States to become a financial power.

Since modern times, the transformation of the world's financial center has gone through the stages of "Northern Italian Finance" centered on independent cities such as Florence, to "Dutch Finance" centered on Amsterdam, to "British Finance" centered on London, and "American Finance" centered on Wall Street in New York, and finally to the gradual shift of the world's financial center to the Asia-Pacific region and gradually showing a multipolar development trend. The changes in the world's financial centers since modern times reflect the transfer of financial power and the rise and fall of great powers.

(3) Strong financial supervision and talent team are the fundamental guarantee of a strong financial country

Strong financial regulation is an important guarantee for a strong financial country. The financial regulatory system has been gradually established in the process of rectifying financial crises one after another, and each crisis has forced the regulatory authorities to adjust and change the focus and mode of supervision to adapt to the new requirements of changes in the financial environment.

The South China Sea Bubble in the early 20s of the 18th century gave birth to the British Bubble Act. Before 1913, under the leadership of laissez-faire thinking, the continuous banking crisis in the United States and the "savage growth" of the capital market made the financial system full of risks, which gave birth to the Federal Reserve Act of the United States. The bill announced the creation of the U.S. Federal Reserve System and gave the Fed four major functions: implementing a unified monetary policy, establishing a national clearing and payment system, assuming the role of lender of last resort, and regulating the banking industry. Since then, the Fed has become the core institution of the U.S. financial regulatory system. The Great Depression of the early thirties of the 20th century led to the enactment and adoption of the Glass-Steagall Act in the United States in 1933. The Act explicitly restricts the cross-industry operation of the banking industry and the securities industry, and prohibits commercial bank-affiliated enterprises from mainly engaging in securities issuance, listing, and underwriting, marking that the US financial industry has officially entered an era of separate business operation and supervision. In 1999, President Clinton signed the Financial Services Modernization Act into law, marking the end of the Glass-Steagall Act and the formal embarkation of the United States on the road of integrated financial management. With the outbreak of the subprime mortgage crisis in the United States in 2007 and the resulting international financial crisis, the Dodd-Frank Act was born, implementing the "Volcker Law", strengthening macro-prudential and micro-prudential, adjusting the regulatory system, and emphasizing the protection of consumer rights and interests. On the one hand, financial supervision will help finance better serve the real economy and avoid shifting from real to virtual, and on the other hand, it will help prevent financial risks, reduce financial destructiveness, and maintain financial security. Both are essential for a financial powerhouse.

At the same time, the financial field is highly professional, complex and knowledge-intensive, and it is very important to build a talent team that is worthy of the important task of building a financial power. In order to better serve the real economy and prevent risks, finance also needs to rely on high-quality financial talents. On the one hand, high-quality financial talents can better play the role of financial resource allocation and promote financial innovation and development, and on the other hand, high-quality financial talents are conducive to identifying, preventing and resolving financial risks in a complex environment. With its well-developed higher education, open immigration policy and social environment that encourages innovation, the United States has attracted a large number of high-quality financial talents, providing talent support for its construction as a financial power. Taking New York and London as examples, thanks to their high degree of openness, their financial employees accounted for 10% and 25% of the city's total employment for a long time.

3. Anchor the goal of becoming a financial power and promote high-quality financial development

General Secretary Xi Jinping's exposition on the six key core financial elements of a financial power (i.e., the "six strong") and the six aspects of building a modern financial system with Chinese characteristics, namely, "a scientific and stable financial regulation and control system, a reasonably structured financial market system, a financial institution system with division of labor and cooperation, a complete and effective financial supervision system, a diversified and professional financial product and service system, and an independent, controllable, safe and efficient financial infrastructure system" (referred to as the "six systems") It is not only a summary of the objective laws of modern financial development, but also points out the direction for anchoring the goal of becoming a financial power and promoting high-quality financial development.

The "six powerful" and the "six systems" have an intrinsic logical relationship, reflecting the relationship between the part and the whole. The "six systems" cover the "six strong", and the "six strong" are the most concentrated and prominent aspects of the financial power extracted from the "six systems". We will integrate the "six strong" and "six systems" to explore a practical path to promote high-quality financial development with the goal of becoming a financial power. On the one hand, it is necessary to anchor the goal of becoming a financial power, and focus on "a strong currency, a strong central bank, a strong financial institution, a strong international financial center, a strong financial supervision, and a strong financial talent team" to find the direction of high-quality financial development. On the other hand, it is necessary to adhere to the problem-oriented approach, focus on the weaknesses of China's financial industry, such as the large but not strong financial sector, the low quality and efficiency of financial services for the real economy, the ineffective financial supervision and the accumulation of financial risks, and make up for the shortcomings of high-quality financial development. Adhering to the unity of goal-oriented and problem-oriented is an important methodological basis for anchoring the goal of becoming a financial power and promoting high-quality financial development.

(1) Anchor a strong currency and central bank, accelerate the construction of a modern central bank system, and steadily and steadily promote the internationalization of the RMB

1. Accelerate the construction of a modern central banking system

A strong financial country cannot do without a strong central bank, and it needs to be supported by a modern central bank system to help achieve a balance between stabilizing the economy, adjusting the structure, and stabilizing prices. First, we will continue to improve the monetary policy target system. Adhere to the maintenance of currency stability and financial stability as the two central tasks of the central bank, strengthen forward-looking thinking, overall planning, strategic layout, and overall advancement, and seek a dynamic balance among multiple objectives. Pay more attention to structural goals, pay attention to employment and "dual carbon", etc., dredge the transmission of monetary policy, improve the ability of precise regulation and control of drip irrigation, so that liquidity can flow to the real economy more effectively and accurately. We should improve the anchoring method of intermediary targets, keep the interest rate level in line with the requirements for achieving potential economic growth, and maintain a reasonable growth in the total amount of money and credit and the scale of social financing. The second is to enrich the system of monetary policy tools, innovate structural monetary policy tools, and do a good job in the "five major articles". Give full play to the dual functions of aggregate and structure, while maintaining reasonable and sufficient liquidity in the banking system, establish an incentive compatibility mechanism, link central bank funds with financial institutions' credit allocation to specific fields and industries, and guide financial institutions to invest credit resources in inclusive small and micro enterprises, green development, scientific and technological innovation and other fields, so as to support high-quality economic development. The third is to improve the formation, regulation and transmission mechanism of market-oriented interest rates, and give full play to the important role of the treasury bond yield curve in the transmission of monetary policy and the pricing of financial assets. Promote the yield curve of treasury bonds and credit bonds as the pricing benchmark of the loan market, expand the application scope of the yield curve as the pricing benchmark, build an interest rate transmission framework and policy operation path based on the yield curve of treasury bonds, and improve the accuracy of policy implementation. Fourth, enhance the financial strength and balance sheet soundness of the central bank, and provide solid support for the performance of duties in accordance with the law. Earnestly raise the level of capital gains of the central bank, appropriately increase the proportion of central bank profits, and enhance the financial strength of the central bank. Improve the financial buffer mechanism, strengthen the assessment and classification management of risk assets, establish special reserves and dynamic reserves to make up for various risk losses and alleviate pro-cyclical effects, and improve the soundness of the central bank's balance sheet.

2. Enhance the internationalization of sovereign currencies and strengthen the pricing power and voice of the international financial market

Financial powers have strong ability to participate in or dominate the global economy and financial governance, and sovereign currencies can circulate freely in the international arena, giving full play to basic functions such as international payments, foreign exchange transactions and stores of value, and becoming major international reserve currencies and international commodity-denominated currencies. At present, the pace of diversification of the international monetary system is accelerating, and the internationalization of the renminbi should take advantage of the trend. The first is to improve the institutional arrangements and infrastructure construction for the cross-border use of RMB, and promote the pilot project of integrated capital pooling of domestic and foreign currencies in an orderly manner. We will continue to do a good job in institutional design, policy support and market cultivation, strengthen the coordination between domestic and foreign currencies, improve the construction of infrastructure for the cross-border use of RMB, and create a better policy environment for domestic and foreign entities to hold and use RMB. Second, we will continue to steadily promote bilateral local currency swaps and local currency settlement cooperation between central banks, support the healthy development of the offshore RMB market, and promote the formation of a virtuous cycle between the onshore and offshore RMB markets. Give full play to the role of currency swaps in supporting the development of the offshore RMB market and promoting trade and investment facilitation, and strengthen cooperation with neighboring and ASEAN countries in local currency settlement (LCS). Promote direct transactions of RMB against the currencies of relevant countries, and support overseas countries and regions in developing local RMB foreign exchange markets. The third is to improve the macro-prudential management framework for cross-border capital flows that integrate domestic and foreign currencies, and improve the management and risk prevention and control capabilities of cross-border capital flows under the conditions of opening up. We will further improve the assessment and early warning system for cross-border capital flows, enrich the macro-prudential management toolbox, strengthen the coordination between macro-prudential management and micro-supervision, and improve the management and risk prevention and control capabilities of cross-border capital flows under open conditions, so as to maintain the bottom line of preventing systemic financial risks.

(2) Anchor strong financial institutions and financial centers, and accelerate the construction of modern financial institutions and market systems

1. Establish a financial institution system with division of labor and cooperation

Financial institutions are an important micro foundation for the construction of a financial power. The mainland has the world's largest banking system, with more than 4,000 banking financial institutions, and five large commercial banks have been selected as global systemically important banks. To this end, it is necessary to further build a financial institution system with division of labor and cooperation. The first is to optimize the layout of financial institutions. Focusing on the restructuring and optimization of the financial system, we will optimize the financing structure and the system of financial institutions, consolidate the scale advantages of the banking system, standardize the development of non-bank financial institutions, benchmark against world-class investment banks and investment institutions, form a number of Chinese investment banks and investment institutions that are familiar with the operating rules of the international financial market and have world competitiveness, and accelerate the construction of a financial institution system with overall coordination and clear division of labor. The second is to further improve the differentiated development orientation of financial institutions. Strengthen the functional positioning of policy-based financial institutions, guide large commercial banks to actively undertake strategic financial tasks, encourage joint-stock banks to highlight their operating characteristics and competitive advantages, promote small and medium-sized financial institutions such as urban commercial banks and private banks to carry out characteristic operations based on local areas, and promote all kinds of financial institutions to find the correct positioning and complement each other's advantages. The third is to improve the quality and efficiency of financial institutions in serving the real economy. Encourage financial institutions to strengthen financial innovation around the five major articles of science and technology finance, green finance, inclusive finance, pension finance, and digital finance, improve the diversification and professionalism of financial products and services, and constantly adapt to the new requirements of high-quality economic development. Fourth, enhance the international competitiveness of financial institutions. We will further open up the financial sector to the outside world and provide policy support for financial institutions to participate in international competition and cooperation and expand their international business. Guide banking financial institutions to improve their international operation level, use their own scale and resource advantages to expand their international influence, and encourage fintech enterprises to play an international "leader" role in digital finance and other advantageous fields.

2. Establish a well-structured financial market system

First, we need to accelerate the construction of a safe, standardized, transparent, open, dynamic and resilient capital market, and strengthen the functions of the bond market, money market and foreign exchange market. Focusing on increasing the proportion of direct financing, we will improve the multi-level capital market system. Focus on the key goal of supporting high-level scientific and technological self-reliance and self-reliance, and promote the coordinated development of the stock, bond and futures markets. Develop diversified equity financing, support the Shanghai and Shenzhen stock exchanges to build world-class exchanges, build the Beijing Stock Exchange with high quality, and guide private equity venture capital funds to invest in early investment and small investment technology. The second is to improve the basic system of the capital market. Improve the issuance and underwriting system, steadily implement the registration system in the whole market, improve the information disclosure rule system oriented to the needs of investors, and create a clear rights and responsibilities, unified standards, transparent and efficient issuance review and registration mechanism. Improve the transfer listing mechanism, better play the market functions of each sector, provide high-quality enterprises with diversified development paths and listing options, especially to further deepen the reform of the New Third Board, study and introduce relevant rules for the transfer and listing of selected companies, and improve the service ability of small and medium-sized enterprises. Actively and prudently optimize the transaction settlement system, enrich risk management tools, optimize the margin financing and securities lending and refinancing systems, and steadily promote the reform of the delivery-versus-payment (DVP) settlement system. Improve the self-discipline rule system for listed companies, explore the establishment and improvement of hierarchical and differentiated information disclosure arrangements, improve the adaptability and inclusiveness of the information disclosure system, and study and formulate special information disclosure guidelines in key areas such as advanced manufacturing, digital economy, and green and low-carbon. Improve the investor protection system, accelerate the implementation of the securities class action system, improve the institutional mechanisms for the exercise, protection and relief of investors' rights, and actively advocate a culture of long-term investment, value investment and rational investment. Improve the accounting, performance evaluation and incentive mechanisms for equity investment, and cultivate and strengthen the willingness and ability of the capital market for long-term investment. Improve the legal guarantee and supporting systems for the capital market, build a legal and regulatory system that conforms to the laws of capital market development, promote the improvement of a regulatory and law enforcement system that connects and supports administrative law enforcement, civil recovery, and criminal punishment, and comprehensively improves the efficiency of governing the market according to law by strengthening the supply of systems. Establish and improve an open and transparent capital market system and rule system, so that the market has clear expectations for supervision, and realize a virtuous cycle of market ecology.

3. Promote the development of Shanghai and Hong Kong as international financial centers

The transformation of an international financial center is an important symbol of the rise and fall of a financial power, and to build a financial power, it is necessary to build a more competitive international financial center. To build a financial power, it is necessary to further enhance the influence of Shanghai and Hong Kong as international financial centers in the global financial market. The first is to enhance the competitiveness and influence of Shanghai as an international financial center. It will further attract world-class financial and headquarters enterprises, as well as world-class law firms, rating agencies, accounting firms and other professional institutions to gather in Shanghai, and promote the formation of a complete ecological environment for the entire financial industry chain. Support Shanghai to build a financial market system with global influence, build an international financial asset trading platform, better play the role of the "test field" of the Science and Technology Innovation Board, promote the deepening and implementation of the registration system, and build a high-level reinsurance international board. The second is to consolidate and enhance Hong Kong's status as an international financial centre. Strengthen Hong Kong's position as a global investment and financing platform, and support Hong Kong in building a bridgehead for overseas capital to "bring in" and domestic enterprises to "go global". Enhance the mutual access mechanism between the financial markets of the Mainland and Hong Kong, enrich risk management products and liquidity management arrangements, and enhance the connection between the offshore and onshore markets. Strengthen Hong Kong's position as a hub for offshore RMB business, promote the inclusion of RMB counters in Hong Kong Stock Connect, promote RMB-denominated trading of Hong Kong stocks, promote the implementation of measures for offshore treasury bond futures, and diversify the types of RMB investment products.

(3) Anchor strong basic support, and focus on the construction of financial infrastructure and financial rule of law

Financial infrastructure is a system and institutional arrangement that provides basic public services for all kinds of financial activities, a basic guarantee for the steady and efficient operation of the financial market, and an important starting point for strengthening financial risk prevention and control, implementing macro-prudential management and ensuring financial stability and financial security. The construction of a financial power is inseparable from the strong financial infrastructure to provide strong support. Historical experience has shown that the resilience of the financial infrastructure lies in the resilience of the financial infrastructure that can continue to provide the necessary financial services in the face of crises and shocks. At the same time, the rule of law is an important cornerstone for the healthy development of financial markets. In the financial sector, contracts, governance, rights and interests all rely on the rule of law to ensure that the interests of all parties are equally respected and protected. The history of financial development over the past thousand years tells us that the operation, development and stability of finance rely on credit, and the rule of law is the most fundamental and effective support and guarantee for credit.

1. Improve the construction of financial infrastructure system to provide support for the steady and efficient operation of the financial market

As an important component of the national financial system, financial infrastructure is the basic guarantee for connecting financial institutions and maintaining market operation, and a developed, efficient and stable financial infrastructure is a necessary condition for building a financial power. To establish and improve an independent, controllable, safe and efficient financial infrastructure system, it is necessary to focus on the following tasks. The first is to improve the operational efficiency of financial infrastructure. Optimize the layout of financial infrastructure, enhance the integrity of various financial infrastructures, promote orderly interconnection between financial infrastructures, and improve operational efficiency and service levels. Accelerate the application of emerging technologies in payment and settlement, registration and custody, credit rating, database construction and other fields, and build an internationally competitive financial infrastructure. The second is to strengthen the protection of critical financial infrastructure. Strengthen the security review and assessment of financial infrastructure with a large number of participants, high market share, large business relevance, and operational failure that will have a significant impact on the risk of the financial system, and strengthen the management of key business positions, technical specifications, system failure emergency response mechanisms and disaster backup mechanisms for systemically important financial infrastructure. The third is to enhance the independence of financial infrastructure. Enhance the independence of financial infrastructure in the design, operation and maintenance and formulation of relevant systems, improve the ability of independent research and development and innovation, ensure the independence and control of core technologies and key resources, and maintain absolute national control over financial infrastructure involving national financial security and strong spillover. Fourth, it is necessary to establish an open financial infrastructure system that adapts to the rules of the international market. Improve the systems and infrastructure arrangements for RMB cross-border investment and financing, transaction settlement, etc., expand the scope of international application of the RMB Cross-border Payment System (CIPS), and accelerate the integration of CIPS with other international settlement systems in terms of standards and rules. Establish a financial infrastructure system such as credit rating, taxation, accounting, and auditing that is in line with international standards, and establish a professional and international information disclosure system.

2. Strengthen the construction of financial rule of law to escort the development of the financial industry

General Secretary Xi Jinping stressed at the Central Financial Work Conference that it is necessary to strengthen the construction of financial rule of law, timely promote legislation in key financial areas and emerging fields, and escort the development of the financial industry. A market economy is essentially an economy governed by the rule of law. From the creation and evolution of money to the innovation and development of financial instruments, the foundation behind it is trust. Financial operations are inherently dependent on trust (and credit). Compared with the physical security in the real economy, finance is completely dependent on credit, and it needs to be guaranteed by the spirit of contract and the rule of law. Whether it is to strengthen the party's centralized and unified leadership over financial work or to comprehensively strengthen financial supervision, we must rely on the system and the rule of law. On the one hand, as the deepening of the supply-side structural reform of the financial sector enters the deep water area, it has become more urgent to build consensus on reform and standardize development behavior with the rule of law, so as to provide a rule system with a complete framework, clear logic and complete system for financial activities. On the other hand, the pace of financial innovation driven by the new round of scientific and technological revolution is accelerating, and new financial formats, financial products and financial services are constantly emerging. In addition, we will strengthen the enforcement of the financial legal system and have zero tolerance for all kinds of violations of laws and regulations. The first is to improve the financial legal system. Strengthen the enactment, reform, abolition and interpretation of important laws and regulations in the financial sector, accelerate the completion of institutional shortcomings in emerging fields, and give play to the role of judicial interpretations, departmental rules, and normative documents in filling gaps. Promote the effective convergence of financial laws and other laws, and build a systematic and complete financial rule of law system. The second is to standardize the development of financial innovation. Strengthen research on new forms of financial business, new businesses, and new entities, improve the inclusiveness and compatibility of financial legislation, and persist in promoting financial innovation and development on the track of marketization and rule of law. Crack down on illegal financial activities carried out in the name of financial innovation, eliminate regulatory gaps and blind spots to the greatest extent, and eliminate the space for illegal business development. The third is to improve the level of financial justice. On the basis of summarizing the experience of the financial court system, operation experience, and reform experience, accelerate the construction of a fair, efficient, and authoritative financial trial system, improve the level of specialization and internationalization of financial trials, enhance the quality and efficiency of financial trials and judicial credibility, and give play to the role of financial justice in guiding the value of the financial market and guiding rules.

(4) Anchor a strong institutional guarantee, and strive to strengthen the party's leadership and the construction of the financial supervision system

1. Strengthening the party's leadership is the fundamental guarantee for building a financial power

East, West, North, South, Middle, Party, Government, Military and Civilian Studies, the Party is the leader of everything. Whether the party's leadership is well adhered to and whether the party building is done well or not has a bearing on the cohesion and combat effectiveness of the financial system and determines the success or failure of the financial undertaking. To uphold the political and people's nature of financial work, the most important thing is to uphold the centralized and unified leadership of the CPC Central Committee over financial work, and to ensure the correct direction of the development of the financial industry by permeating the party's leadership throughout the entire process and all aspects of financial work. The first is to fully implement the spirit of the 20th National Congress of the Communist Party of China and continuously improve the system and mechanism of the party's leadership in financial work. The Central Financial Commission should give full play to its role as a decision-making, deliberative and coordinating body, the Central Financial Work Commission should lead the Party work in the financial system in a unified manner, and the central financial management departments should assume the main responsibility for supervision in accordance with their statutory duties, actively give full play to their professional advantages and perform industry management responsibilities, and jointly promote the establishment of a scientific and efficient financial stability guarantee system. Further strengthen the leadership of local party committees over the party organizations of financial institutions, establish and improve the major risk handling mechanism for which the main leaders of the local party and government are responsible, give full play to the role of the financial committees and financial working committees of local party committees, and implement territorial responsibilities. Second, it is necessary to give full play to the institutional advantages of the party's leadership over financial work and improve the systematic, scientific, and effective monetary and financial policies. Strengthen the evaluation and supervision of monetary and financial policies by the Party Central Committee and its economic and financial work departments, strengthen the coordination and cooperation of fiscal, monetary, employment, industrial, regional, science and technology, environmental protection and other policies, strengthen economic publicity and public opinion guidance in the process of decision-making and policy-making, effectively enhance market expectations, and stabilize market confidence. With the overall planning of development and security as the major principle, under the centralized and unified leadership of the CPC Central Committee, we will improve the communication, coordination and cooperation mechanisms between the national security departments and the economic and financial departments, form an authoritative, efficient, flexible and smooth overall planning and coordination mechanism and command system for development and security work, and do a good job in the two major issues of development and security. The third is to embed the party's leadership into the corporate governance structure of state-owned financial institutions, and improve the modern financial enterprise system with Chinese characteristics. The focus is on strengthening the party's leadership over state-owned financial institutions, upholding and improving the party's leadership as the greatest feature of the modern financial enterprise system with Chinese characteristics, giving play to the decisive role of the party's leadership in ensuring the correct direction and road, earnestly fulfilling the responsibility of maintaining and increasing the value of state-owned financial assets, and safeguarding the rights and interests of all shareholders and the fundamental interests of the broad masses of the people.

2. Adhere to the principle of the party's management of talents, and strive to forge a high-quality financial talent team that meets the needs of the new era

To build a financial power, it is necessary to build a talent team that is worthy of important tasks, maintain purity, enhance professionalism and enhance combat effectiveness. In the new era, financial talents must deepen their understanding of the political and people's nature of financial work, support the centralized and unified leadership of the CPC Central Committee over financial work, firmly establish the value concept of "people first", have a strong sense of social responsibility and mission, and have the courage to take responsibility in serving the overall development of the country. They have undergone rigorous ideological tempering, political training, practical training, and professional training, and have the courage to speak out and show their swords, and do a good job in the two major events of financial development and financial security. The first is to maintain the purity, professionalism and combat effectiveness of the financial team at the core of the construction of the financial talent team. It is necessary to take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guide, fully implement the spirit of the 20th National Congress of the Communist Party of China, completely, accurately and comprehensively implement the new development concept, adhere to the standards of strong politics, ability and work style, fully implement the spirit of the Central Financial Work Conference with a promising spirit and solid and effective work measures, continuously improve the quality of financial talents, and ensure the purity, professionalism and combat effectiveness of the mainland's financial team. The second is to do a good job in cultivating professional financial talents in key financial fields. It is necessary to focus on new fields and new tracks for high-quality financial development, study the evolution trend of the demand for talents in the future financial development of the mainland, and strengthen the cultivation of financial talents in key areas such as science and technology finance, green finance, inclusive finance, pension finance, and digital finance. The third is to establish a functional, efficient and convenient financial talent service system. Deepen the supply-side structural reform, stimulate the innovation and entrepreneurship of financial talents, and make the government and the market work together to jointly break down institutional and institutional obstacles, and build a unified, open, competitive and orderly financial talent market system.

3. Build a complete and effective financial regulatory system to ensure the stable development of the financial sector

Strong financial supervision is a powerful guarantee for the construction of a financial power. It is necessary to earnestly enhance the deterrent and authoritative nature of financial supervision, and severely punish those who create major financial risks, so that financial supervision can truly "grow teeth and thorns". The first is to implement full coverage of financial supervision. Coordinate the construction of a full-coverage financial regulatory system and mechanism to ensure that there are no blind spots, no blind spots, and no exceptions in supervision. It is necessary to manage the illegal even more than the legal, and it is necessary to manage both "licensed violations" and "driving without a license"; the management of industries must manage risks, and strictly guard against the alienation of ordinary commercial activities into illegal financial activities and the derivation of financial risks; and the establishment and improvement of a thorough supervision mechanism led by the State Administration of Financial Supervision. The second is to improve the effectiveness of financial supervision. Focus on the "key things" that affect financial stability, the "key people" that cause major financial risks, and the "key behaviors" that undermine market order, and comprehensively strengthen institutional supervision, behavior supervision, functional supervision, penetrating supervision, and continuous supervision. Explore ways to improve supervision, accelerate the construction of regulatory big data platforms, and make full use of scientific and technological means to improve the ability to identify, warn and deal with cross-market, cross-business and cross-regional financial risks. The third is to improve the risk disposal responsibility mechanism with consistent rights and responsibilities. Consolidate the responsibilities of financial institutions, shareholders, actual controllers, financial management departments and local governments, strengthen regulatory coordination and linkage, improve the early correction mechanism of financial risks with hard constraints, and early identification, early warning, early exposure and early disposal of risks, so as to firmly guard the bottom line of no systemic financial risks. Fourth, actively participate in the reform of international financial supervision. Make full use of various resources and platforms to actively participate in the reshaping of international financial regulatory rules, strengthen cross-border financial regulatory cooperation, and promote the formation of a more complete international financial regulatory system and a more fair and efficient global financial governance pattern.

[Zhang Xiaojing: Member of the Chang'an Street Reading Club, Director of the Institute of Finance of the Chinese Academy of Social Sciences]

Note: Authorized to publish, this article has been selected and included in the "Chang'an Street Reading Club" theoretical learning platform (People's Daily, People's Political Consultative Conference Daily, Beijing Daily, Chongqing Daily, Xinhuanet, CCTV, National Party Media Information Public Platform, Vision, Beijing Time, Surging Government Affairs, Phoenix News Client "Chang'an Street Reading Club" column synchronization), reprinting must be uniformly marked "Chang'an Street Reading Club" theoretical learning platform source and author.

Editor-in-charge: Liu Xingyue, preliminary review: Cheng Ziqian, Chen Jiani, re-examination: Li Yufan

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