Per reporter: Zhang Yi Per editor: Yang Jun
On October 21, the 2021 China Capital Innovation Chengdu Summit kicked off in Chengdu. As the highlight of the 2021 Chengdu Global Innovation and Entrepreneurship Fair, the summit was hosted by the Chengdu Municipal People's Government, and jointly hosted by the Chengdu Local Financial Supervision and Administration Bureau, the Western Base of the Capital Market Service of the Shanghai Stock Exchange, the Western Base of the Shenzhen Stock Exchange, and the Southwest Base of the National SME Share Transfer System. The summit invited Zhu Guangyao, Ba Shusong, Fan Gang, Liu Jipeng, Zhu Ning and other well-known economists; stock exchanges such as the Shanghai Stock Exchange, Shenzhen Stock Exchange and other stock exchanges, as well as well-known venture capital institutions and executives of listed companies to attend the meeting, and the guests discussed the path of empowering the digital economy through the whole life cycle financial supply around the theme of "diversified capital innovation and multi-dimensional financial supply".
"This meeting is of significance for promoting the healthy development of China's capital market." Zhu Guangyao, an important guest of the summit and former Vice Minister of Finance, will deliver a keynote speech through the video. He said that in the past year or so, China's capital market has continuously expanded its opening up to the outside world, which is an important link in the opening up of high quality and high level. Under the new development pattern of "double circulation", China is making its own efforts for a stable international environment, a stable international capital market and a stable international energy market.
Zhu Guangyao also stressed that it is necessary to fully understand and be vigilant against the risks and challenges in international capital flows, and at the same time, China's capital market needs to continue to work hard to improve the level of governance, improve governance norms, and improve market maturity, so as to better serve the real economy and promote the continuous high-quality development of the economy.
Zhu Guangyao Visual China map
Fully understand international capital flows
Zhu Guangyao said that the continuous advancement and development of China's capital market is inseparable from China's efforts to improve the level of market-oriented, legalized and internationalized business environment.
At present, China is promoting the construction of a new development pattern with the domestic cycle as the main body and the international and domestic dual cycles promoting each other, which is an important strategic measure for China to take advantage of the momentum and promote the new journey of building a modern socialist country after building a moderately prosperous society in an all-round way.
"However, adhering to the domestic cycle as the main body is by no means to closely operate china's economy, but to make China's economy develop more closely with the global economy." Zhu Guangyao said that the close integration of China's capital market and the global capital market is conducive to the healthy and sustainable development of China's economy and the economic and financial cooperation of various international countries. He hoped to see that while China's financial market and capital market are opening wider to the outside world, Chinese enterprises in other countries are also welcomed and supported, so as to minimize the obstacles for financial institutions to operate abroad.
Zhu Guangyao also stressed that because of the importance of the financial market and the capital market itself, China should have full understanding and vigilance against the risks and challenges in international capital flows, further improve policy maturity, and ensure that it has sufficient policy tools to deal with them in a timely manner when sudden challenges may occur in the financial market.
In addition, China's capital market also needs to continue to work hard to improve the level of governance, improve governance norms, and improve market maturity, better serve the real economy, and promote China's economy to continue to move forward on the track of high-quality development.
Be highly vigilant at two time nodes
Speaking of the current situation of the global capital market, Zhu Guangyao pointed out that there are two time nodes that require high vigilance, and these two time nodes are closely related to the US financial market.
The first time node is November 3-4 this year, that is, the time of the us Federal Reserve Bank (hereinafter referred to as the Federal Reserve) interest rate meeting.
Zhu Guangyao said that the market generally expects that at this meeting, the Fed will announce a reduction in bond purchases for the quantitative easing monetary policy that has been in place since April 2020, and the total monthly purchase volume is currently $120 billion, which is expected to be reduced by $15 billion per month according to everyone's judgment.
"However, this is not like some reports that the Fed has begun to shrink its balance sheet." Zhu Guangyao pointed out in particular that looking back at the steps and paths taken by the Fed to withdraw from quantitative easing monetary policy from 2013 to 2016, it has experienced three processes: reducing bond purchases to "0 purchases", gradually implementing interest rate normalization, and reducing the amount of balance sheet.
Zhu Guangyao analyzed that since the beginning of April 2020, the total balance sheet of the Federal Reserve has doubled to 8.2 trillion US dollars, an increase that has exceeded the growth of the Fed's balance sheet under the three rounds of quantitative easing monetary policy in the United States after the outbreak of the global financial crisis in 2008. If calculated according to market expectations, the Fed is expected to complete this expansion in 8 months, that is, by June 2022, and start the process of raising interest rates after the end of next year, and then begin to reduce the size of the balance sheet, which will have an important impact on the US economy.
"It's time for the boots to really fall, and we're going to watch closely." He said that the current inflationary pressure in the United States is increasing, and it may last longer than expected, and the monetary policy adopted by the Federal Reserve in response to inflationary pressures will have a spillover impact, and the impact on international capital markets, especially on emerging market countries, will soon appear.
The second time node is December 3 of this year, which is the deadline for the US debt ceiling that the market is very concerned about.
Zhu Guangyao pointed out that although the democratic and republican parties in the United States have previously raised the $28.4 trillion national debt ceiling by $48 million in early October, and extended the term of debt default from October to December 3, the bipartisan game has not ended, which will also be directly related to the national credit of the United States and the rating of U.S. Treasury bonds in the capital market. "Back in August 2011, when the U.S. domestic political game over the cap on treasuries led Standard & Poor's announcement to downgrade the credit rating of U.S. Treasuries from AAA to AA+, which had a huge shock to the market."
In the face of the above two major factors that may have a significant impact on the international capital market, Zhu Guangyao advocated strengthening international exchanges and communication. "In 2011, on the issue of the us treasury bond ceiling, in 2013, the Fed adjusted the quantitative easing monetary policy, and both China and the United States conducted good policy communication through the China-US economic dialogue mechanism. Today, whether it is the degree of volume or the intensity of the impact of the crisis on the capital market, the degree of danger is greater than that of the year. Therefore, the timely policy exchanges and communication between China and the United States, as well as the policy exchanges and communications of the G20 countries, have become very important. Zhu Guangyao said.
On October 20, the 2021 Chengdu Global Innovation and Entrepreneurship Fair was held in Chengdu per reporter Zhang Jian
Keep an eye on international oil prices
In addition to the US monetary policy and the national debt ceiling, Zhu Guangyao believes that there is another problem that needs to be paid close attention to, that is, the impact of the current world oil prices on the international capital market.
"The key to the stability of the capital market is the accuracy of expectations and the establishment of confidence, but in the past two or three months, the sharp rise in oil prices in the international capital market, especially the price of natural gas LNG, has had a major impact on the stability of the international capital market and the judgment of expectations." Zhu Guangyao said that at present, the price of crude oil futures in the United States has exceeded 82 US dollars / barrel, hitting a new high in 7 years, brent crude oil futures prices have almost reached 85 US dollars / barrel, a new high in nearly 3 years, the growth rate has exceeded market expectations and necessary policy preparations, this excessive energy price, will have a major impact and impact on the global economic development and the stability of the global capital market.
He pointed out that especially with the harsh winter approaching, how to prevent the further rise in oil prices and solve the energy needs of residents and enterprises to produce? "As with the exchange of monetary policy, it is very important to conduct timely policy exchanges on energy market prices and energy market stability."
Zhu Guangyao believes that the consultation and coordination of energy supply and demand, the world's major economies play an active role, through effective policy communication, to ensure a basically reasonable and stable market expectations, which not only in line with the interests of all countries, but also can form a reasonable energy structure, promote global carbon reduction actions. Such stability and predictability are very important in the context of the development of financial markets as a whole, and all countries should work together to meet the challenges within the framework of peaceful development.
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