Accelerate to the "new"! The banking and insurance industry has a clear line for doing a good job in the "five major articles".

How to do a good job in the financial industry has a clearer context of how to do a good job in the "five major articles".

Recently, the State Administration of Financial Supervision and Administration issued the "Guiding Opinions on the Banking and Insurance Industry to Do a Good Job in the Financial "Five Articles" (hereinafter referred to as the "Guiding Opinions"), which puts forward clear requirements for the "Five Major Articles" of finance from five aspects, including the main objectives and optimization of financial products and services, and makes comprehensive arrangements.

Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, told the International Finance News that the guidance is of great significance in promoting financial institutions to accelerate the improvement of service mechanisms, implement the decision-making and deployment of the "five major articles" of finance, improve the quality and level of financial services for the real economy, and promote the development of a new quality productivity system.

"The guidance will help continue to strengthen banking and insurance institutions, further increase financial support for private, small and micro enterprises and individual industrial and commercial households, and then inject a 'booster' into the development of market entities such as the private economy." Economist Song Qinghui added to reporters.

Strengthen top-level deployment

"Do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance", at the Central Financial Work Conference held at the end of October 2023, the "five major articles" were proposed for the first time. Since then, the Central Financial Commission, the People's Bank of China, the State Administration of Financial Supervision and Administration, the China Securities Regulatory Commission and other departments have held meetings or publicly announced that they will carry out work around "doing a good job in the five major articles".

The Central Economic Work Conference at the end of 2023 further proposed to "guide financial institutions to increase support for scientific and technological innovation, green transformation, inclusive small and micro enterprises, digital economy, etc."; During the two sessions this year, Pan Gongsheng, governor of the central bank, reiterated that "doing a good job in the 'five major articles' such as science and technology finance is an important focus for the high-quality development of the real economy of financial services, and it is also an important part of deepening the structural reform of the financial supply side".

Then on May 9, the guidance once again clearly required that in the next five years, the banking and insurance industry will have a multi-level, wide-coverage, diversified and sustainable "five major articles" service system basically formed, the relevant working mechanism will be more perfect, the products will be more abundant, and the availability, coverage and satisfaction of services will be greatly improved, which will effectively promote the development of new quality productivity. The relevant regulatory system and supporting mechanisms have been further improved, the evaluation system has become more sound and effective, and the policy coordination has been continuously enhanced.

Specific to the five sections of the "five major articles", all financial regulatory departments are strengthening their deployment. For example, in January 2024, the State Administration of Financial Supervision and Administration issued the Notice on Strengthening the Whole Life Cycle Financial Services of Technology-based Enterprises, which clearly proposes to promote the banking and insurance industries to further strengthen the full life cycle financial services of technology-based enterprises. Also in January this year, the General Office of the State Council issued the "Opinions on the Development of Silver Economy to Enhance the Well-being of the Elderly", proposing to enrich the development of pension financial products.

Industry insiders believe that doing a good job in the "five major articles" of finance is an inevitable requirement for conforming to the transformation and upgrading of the mainland's economic structure and helping high-quality economic development. With the mainland's technological changes, demographic changes, industrial transformation and upgrading, regional restructuring and urbanization development, the economy has put forward new requirements for the financial sector, and doing a good job in the "five major articles" will be the core work of the financial field.

Form a virtuous circle of "science and technology-industry-finance".

Science and technology finance is at the top of the five major articles, which echoes the industrial orientation of the construction of the mainland's modern industrial system and the development of new quality productive forces, which shows its importance.

The guiding opinions set the main goals of science and technology finance: to further enhance the financial services for the whole life cycle of science and technology enterprises, to significantly improve the level of capital and insurance protection for R&D activities and the transfer and transformation of scientific and technological achievements, to continuously optimize the risk sharing mechanism of science and technology finance, and to strive to form a virtuous circle of "science and technology-industry-finance".

"Financial institutions need to innovate financial products around the development characteristics and financing needs of scientific and technological innovation enterprises to guide financial resources to tilt towards scientific and technological innovation while balancing risks." Zhou Maohua emphasized, for example, innovating supply chain finance, exploring intellectual property pledges, strengthening cooperation with other departments and market institutions, reducing information asymmetry, and innovating financial service models.

Focusing on the insurance industry, Yang Fan, general manager of Beijing Paipaiwang Insurance Agency Co., Ltd., added to the International Financial News that the insurance market is fiercely competitive, and with the changes in the economy, technology and environment, the risk situation is becoming increasingly complex, and it is also facing strict regulations and compliance requirements.

He suggested that insurance institutions should continuously improve their products and services, continuously optimize their risk management systems, improve their risk response capabilities, and spend a lot of time and resources to ensure that their products and services meet regulatory requirements and manage potential compliance risks.

At the same time, the guidance requires science and technology finance to face difficulties and focus on key points, help lead modern industrial innovation with scientific and technological innovation, and promote the development of new quality productive forces.

"As a large state-owned financial institution, Chinese Life focuses on science and technology finance, continues to give full play to the advantages of large scale, long term and high stability of insurance funds, helps lead the construction of modern industries with scientific and technological innovation, and promotes the cultivation and development of new quality productive forces." Zhao Jun, vice president of Chinese Life Asset Company, revealed that by the end of 2023, the insurance premium income of strategic emerging industries of Chinese Life Group was nearly 8.5 billion yuan, a year-on-year increase of 43.4%; The premium income of science and technology insurance exceeded 3.3 billion yuan, a year-on-year increase of 27.1%; The stock scale of insurance fund investment to support self-reliance and self-improvement in science and technology exceeded 330 billion yuan, a year-on-year increase of 6.6%; The balance of loans to science and technology enterprises of China Guangfa Bank was nearly 189 billion yuan, a year-on-year increase of 30.3%.

Promote the comprehensive green transformation of economic and social development

"The green finance standards and evaluation system have been improved, the financial support for the green, low-carbon and circular economy has been continuously strengthened, the coverage of green insurance has been further expanded, and the environmental, social and governance (ESG) performance of banking and insurance institutions has continued to improve." This is the target requirement for green finance in the guidance.

In terms of optimizing products and services, the guidance emphasizes that green finance should take advantage of the momentum, establish first and then break down, and promote the comprehensive green transformation of economic and social development. It will also guide banking and insurance institutions to actively support energy conservation, pollution reduction, carbon reduction, greening and disaster prevention in key industries and fields, and promote the construction of a clean and low-carbon energy system and the promotion and application of green technologies.

The reporter learned that at present, the mainland has initially formed a multi-level green financial products and market system such as green loans, green bonds, green insurance, green funds, green trusts, and carbon financial products.

"To do a good job in green finance, we should focus on the two key areas of vigorously promoting transition finance and building a sustainable information disclosure system." Ma Jun, president of the Beijing Institute of Green Finance and Sustainable Development, said frankly in an interview with the International Finance News that in the past eight years, the mainland has initially built a green financial system that supports "pure green" or close to "pure green" economic activities, but there is no clear framework for how finance can support the transition to low-carbon industries in high-carbon industries, and the amount of financing that can be regarded as "transition finance" is less than 1% of the amount of green finance financing.

In this regard, Ma Jun proposed that the next step should be to change the practice of "one-size-fits-all" pressure reduction loans for the "two highs and one surplus" industry as soon as possible, establish clear standards for financial support for transformation activities, guide enterprises to prepare scientific and feasible transformation plans, and provide incentive mechanisms for transition finance. In addition, it is necessary to speed up the establishment of sustainability information disclosure standards based on the International Sustainability Standards Board (ISSB), and make it mandatory for listed companies and large banks to take the lead in disclosing climate-related information, so as to prevent the risks of "greenwashing" and "fake transformation" and guide financial resources to allocate low-carbon economic activities more accurately.

A high-quality inclusive financial system has been basically built

The core of inclusive finance focuses on pain points and difficulties, and it is necessary to serve people's livelihood and promote common prosperity for all people. According to the requirements of the guiding opinions, it is necessary to basically build a high-quality inclusive financial system and help common prosperity reach a new level. The inclusive financial service system has been continuously optimized, the inclusive credit system has been consolidated and improved, and the inclusive insurance system has been gradually improved.

Professor Su Fang, director of the Institute of Finance and Insurance of Shanghai University of Finance and Economics and doctoral supervisor, said that from the main goal of inclusive finance, it can be seen that the state has put forward different requirements for various systems of inclusive finance, namely "continuous optimization", "consolidation and improvement" and "gradual improvement", which also shows that the development of inclusive insurance system is still relatively backward and not comprehensive enough, which requires inclusive insurance to be further covered in breadth, such as full cost insurance and planting income insurance covering rural and agricultural areas from the service object. It can ensure that farmers' incomes are not affected by the disaster, thereby consolidating the achievements of poverty alleviation.

Zhu Junsheng, former research director of Tsinghua PBC Insurance Center, said that agricultural insurance, as an important means to disperse the risks of agricultural production and operation, plays an important role in promoting the development of modern agriculture, promoting the revitalization of rural industries, improving rural governance, and ensuring farmers' income.

"However, compared with the new requirements of rural revitalization and common prosperity for agricultural insurance, there are still some challenges in the high-quality development of agricultural insurance, including the level of protection still needs to be improved, the development of local agricultural special product insurance is insufficient, and the quality and efficiency of underwriting claims need to be improved." Zhu Junsheng said bluntly. Therefore, in the current guidance and the previously issued "Implementation Opinions of the State Council on Promoting the High-quality Development of Inclusive Finance", it is proposed to expand the implementation scope of the full cost insurance and planting income insurance of the three major grain crops, and encourage the development of local advantageous and characteristic agricultural product insurance according to local conditions.

Zhu Junsheng suggested that in order to build a high-quality service system, policy coordination can be strengthened, and the system and mechanism for the high-quality development of agricultural insurance can be improved, including further clarifying the positioning of policy-based agricultural insurance and corresponding policy support, clarifying the boundary between the government and the market, improving the market access and exit mechanism, improving the catastrophe risk diversification mechanism, and optimizing the premium subsidy settlement method; Encourage the exploration of risk reduction management, etc., and consolidate the institutional foundation for improving the quality and efficiency of agricultural insurance.

Improve the pension financial system

Pension finance should improve the system, improve well-being, and actively adapt to the requirements of the development of an aging society. The main goals are: the standardized development of the third pillar of pension insurance, the abundance of pension financial products, and the continuous increase of financial support for the silver economy, health and pension industry, so as to better meet the needs of pension finance.

Bao Hongjian, a member of the Financial Laboratory of the CITIC Reform and Development Research Foundation and president of the Asian Institute of Ageing Finance and Industry, believes that from a macroeconomic point of view, the "five major articles" have been connected in series. She said that the pension problem is directly related to the aging of the population and the change of population structure, which is behind the major changes in the structure of the main body of the economy, the changes in industry, technological innovation, etc., and it is also the common background and important foundation that can not be ignored in the "five major articles".

She bluntly said that as a long-term national strategy, financial institutions should balance short-term benefits and medium and long-term benefits, and establish a special organization and a reasonable performance orientation. At the same time, it is necessary to do in-depth research on how to develop pension finance, and to effectively understand the needs of the elderly group, or the pension needs that young and middle-aged groups may generate in the future. In addition, it is necessary to improve its own pension asset allocation and management capabilities, pension service integration capabilities, pension planning and consulting capabilities, etc. "Only in this way can the people have a real sense of gain, trust in financial institutions, and be willing to hand over the wealth of the second half of their lives to the management of institutions to achieve a win-win situation."

Zhu Junsheng believes that the key to the current development of pension finance is to improve the design of the personal pension system and improve the participation rate of personal pensions.

"Compared with the first and second pillars, the third pillar personal pension has institutional attributes such as decentralization, independence, and actuarial neutrality, which can theoretically cover all groups of people." He suggested that in order to broaden the coverage of personal pensions, the restrictions on the scope of participation can be abolished, and conditions can be created for a large number of flexible employees in the new economy and new forms of employment to participate in the personal pension system, so as to make it a basic, inclusive and comprehensive institutional arrangement in the pension system.

The personal pension system was officially launched on November 25, 2022, and was first implemented in 36 cities and regions, and the number of account opening continued to grow during the pilot period. According to data from the Ministry of Human Resources and Social Security, by the end of 2023, the number of people who have opened personal pension accounts has exceeded 50 million. It was also revealed that the personal pension system is expected to be promoted nationwide this year, and the number of account openings is expected to further increase.

Seize the great opportunity of digital financial development

With regard to digital finance, the Guiding Opinions emphasize the need to seize opportunities, attach importance to security, and improve the convenience and competitiveness of financial services.

Liu Bin, director of the Financial Research Office of the China (Shanghai) Free Trade Zone Research Institute, told the International Finance News that the goal of the guidance on digital finance is to provide assistance for the development of the digital economy, and it is also clear that digital finance should promote the basic formation of the digital regulatory framework process, and the level of digital and intelligent supervision has been significantly improved, indicating that digital finance will play an important role in promoting regulatory technology innovation and serving digital and intelligent supervision in the future. On the basis of efficiently serving C-end and B-end customers, it is necessary to raise the level of digital and intelligent supervision to a new height, which is also an important area for the development of digital finance in the future.

After a period of rapid development, the development of digital finance should consider balancing the relationship between efficiency and risk, and the development of digital finance should not only steadily promote the application of financial technology and promote the digital transformation of financial institutions, but also pay attention to the risks arising from the application of new technologies. "This will be a topic that must be highly concerned about the next step in the development of digital finance." Liu Bin said.

"In the future, the development of digital finance should also focus on the inclusiveness of digital finance, and large financial institutions should export mature technologies, products and services to improve the digital capabilities of small and medium-sized financial institutions." Liu Bin added that digital finance should consolidate the advantages of the development of the digital economy, showing that digital finance is not only an important part of the digital economy, but also an indispensable part of the high-quality development of the digital economy.

According to data from the China Academy of Information and Communications Technology, in 2022, the scale of the mainland's digital economy will reach 50.2 trillion yuan, a year-on-year increase of 10.3%, accounting for 41.5% of GDP. It is estimated that the scale of the mainland's digital economy will reach 56.1 trillion yuan in 2023. With the development of the digital economy, the application scenarios of digital finance and the degree of integration with the real economy are also constantly improving, and its business model and business format are constantly evolving, and have penetrated into our production and life, which mainly include digital banking, digital currency, digital payment, digital credit, digital securities, digital insurance, digital wealth management and other financial formats.