Jin Li, member of the National Committee of the Chinese People's Political Consultative Conference, member of the Standing Committee of the Central Committee of the Jiusan Society, and chair professor of the Guanghua School of Management of Peking University. I provide the picture
Beijing, May 27 (China Youth Network) (Reporter Wang Hai Lu Xuehui) "The foreign exchange we hold together is more than 3 trillion US dollars, which is a rather huge number. The act of reserve foreign exchange itself has a layer of purpose that is to respond to unexpected needs. During the two sessions, Jin Li, member of the National Committee of the Chinese People's Political Consultative Conference, member of the Standing Committee of the Central Committee of the Jiusan Society, and chair professor of the Guanghua School of Management of Peking University, submitted two proposals, "On Properly Responding to the Pressure of Withdrawal of Some Foreign Enterprises" and "New Ideas on Resuming Production and Resumption", both of which mentioned "using some foreign reserves" as a supplementary response to fiscal and financial policies, which attracted much attention from all walks of life. On the evening of May 25, Member Jin Li was interviewed by a reporter from China Youth Network and elaborated on the background, objectives, logic and methods of the two proposals and the proposal of "using some foreign reserves". He stressed: "The use of some external reserves is to solve the urgent needs of enterprises and individuals who are already on the verge of 'life and death'." ”
The "withdrawal of foreign capital" is only a clamor and is not common
However, if there is a business that really wants to withdraw, it can buy its assets
Recently, some Western politicians and foreign media have trumpeted the large-scale withdrawal of foreign companies from China. In this regard, member Kim Lee held that this statement is inconsistent with the facts. He said that most foreign-funded enterprises have had a very good experience in China, and most of them are doing well. Of course, it is not excluded that a very small number of withdrawals are considered. There are no more than two categories, one is that for various reasons, it has begun to consider withdrawing from the Chinese market before the emergence of public opinion, and the other is the one that has been affected by the "decoupling" of Western politicians after the further spread of the epidemic around the world. But I definitely don't think it's universal.
Committee member Jin Lee held that if there is a withdrawal of foreign capital, the main source of pressure will be a small number of Western politicians. With the development of the epidemic, some Western politicians have politicized the epidemic in order to divert domestic contradictions, and use China as a scapegoat and outlet for their domestic contradictions, which has in fact aggravated the operating pressure of some foreign enterprises in China.
He said that if this problem cannot be well dealt with, the epidemic effect will be superimposed, and some Western politicians continue to exert pressure on foreign enterprises in China, which may have a further impact on China's economy. Because the withdrawal of foreign capital is the destruction of domestic production capacity, foreign enterprises account for a considerable proportion of our GDP through import and export activities. Moreover, since many of our exports are actually realized by enterprises that invest and operate in China, if the business activities of foreign-funded enterprises in China are disrupted, it may have a certain impact on our exports and have a certain impact on our employment.
Member Jin Lee held that we should do it from several aspects.
First, our attitude should be clearly articulated. No matter what kind of internal and external environment and pressure Changes China encounters, the attitude of reform and opening up has not changed, and we will only open up more vigorously and promote reform with openness.
Second, if there is more serious pressure, there are some foreign-funded enterprises that belong to the sensitive technology valued by the country or are under the pressure or deception of the domestic government policy, forced to withdraw, when the employees are dismissed, the assets are sold, rather than dismantling and selling the scrap copper and rotten iron, it is better to package the production lines, research and development centers, patents, trademarks, domestic and foreign supply chain systems, human capital, etc. that have been relatively mature and sold to the private enterprises that we have the ability to take over. At this time, the government can use the information advantage to help him shout. If private enterprises have more than enough energy because of the impact of the epidemic, the government can mobilize state-owned enterprises with conditions and capabilities to make a final arrangement.
In this regard, Member Jin Li added: Why should we buy the assets of the withdrawing foreign enterprises as much as possible? Generally speaking, foreign companies have a very strong and complete supply chain system abroad, and after several years of running-in, they are already optimized enterprises. After we buy it, we can directly link it to its original global supply chain system. So in that sense, we keep it and let him have a stake in our business and become our stakeholder.
Where does the money to buy the assets of the withdrawn foreign company come from?
Consideration could be given to partially using China's foreign exchange reserves for payment
Committee member Jin Li held that if foreign capital packages and sells assets, we can give two choices, take the money and leave the people and never come and go, or on the premise that the value of the enterprise is not greatly affected, the money from the sale of assets in China will be converted into equity and continue to invest in the enterprises sold.
He said that the main reasons behind it are as follows:
First of all, almost the global economy has been greatly affected recently, especially after quantitative easing in many countries, funds are easily depreciating under the premise of not being able to find too good investment for the time being.
Secondly, if foreign capital comes to China to invest, it is optimistic about the future development of China, recognizes the value of the Chinese market, and indeed benefits from it, if the money from the sale of assets is converted into equity, then it will still be part of the owner of the original enterprise.
Moreover, if the method of investment and shareholding is adopted, this kind of measure should not have a particularly strong reaction in the foreign government or public opinion, because there is only a financial investment in China.
Fourth, if foreign-funded enterprises are very extreme in their own countries, requiring enterprises not only to come back, but also not to make equity investment in China, in the context of the epidemic, enterprises are already very difficult, where will the money to buy foreign-funded enterprises come from? This can consider partially using China's foreign exchange reserves for payment.
Member Jin Li said: At present, we have more than 1 trillion US dollars of foreign exchange reserves in the United States that are directly invested in its treasury bonds, but it is more difficult for this money to be directly withdrawn from the US market, and it is easy to give people a handle, but if we use US Treasury bonds to buy the assets left behind by foreign capital withdrawal, it is a relatively legitimate reason.
Where is the "Partially Enabled Storage" spotlight?
Solve the urgent needs of enterprises and individuals whose "survival" is threatened
Where are the "new ideas" in Member Jin Li's proposal on "New Ideas on Resuming Work and Production"? Professor Jin Li explained: The so-called "new" is an effective supplement to the existing policy, and this proposal mentions two aspects, one is to guarantee domestic demand and the other is to guarantee external demand.
He said that there is great uncertainty in the restructuring of the global supply chain during the epidemic stage, and our future economic development should first focus on the domestic market and boost domestic demand. Recently, fields such as catering, culture, services, and housekeeping have been greatly impacted, which have directly led to unemployment, income decline and other problems in some of our residents, and even the livelihood of individual residents has been difficult. Now we have introduced a lot of policies and achieved good results, such as consumption vouchers, such as new infrastructure, but they also have some shortcomings:
The new infrastructure directly benefits state-owned enterprises or large enterprises, while small and medium-sized enterprises, especially private enterprises, have limited direct benefits, and the new infrastructure, as an investment, cannot directly stimulate consumption, and the consumption guarantee of the poor and low-income people who are most in need of help is not direct;
Consumption coupons are being piloted everywhere, and for people who are familiar with the Internet and in the city, they are a very good tool to reduce the cost of living, but for some people who are not familiar with the Internet, are in the countryside, and have no use of the real difficulties, it may have a limited effect.
Member Jin Li said that the "new" proposal of "new ideas for resuming work and production" is that we have indeed reached the time to "partially enable external reserves", use the data and technology in our hands to find and focus on those who are the most difficult, who have not received much direct benefit from other policies in the early stage, and who have not fundamentally solved the most basic consumption of food, clothing, housing and transportation. Concentrate financial resources and precise support, rather than sprinkling pepper noodles for all groups.
With regard to specific solutions, Member Jin Li said: For individuals who encounter great difficulties, part of the external reserves should be used as special funds to provide volunteer work opportunities for the most difficult masses during this period, undertake free meals, and solve the problem of eating. Temporary reimbursement of utility rent by the State; The state temporarily bears the most basic expenses such as transportation costs, etc. The improvement of the living conditions of the masses will, to a certain extent, generate demand and stimulate domestic demand, thus further promoting the resumption of work and production of domestic production enterprises.
Member Jin Li said: Due to the continuous impact of the epidemic abroad, our external demand has declined even more severely, and it has affected our export enterprises and their upstream enterprises.
He said that we can carefully identify those export enterprises that have fallen into temporary difficulties due to the chaos of the global supply chain caused by the epidemic and have valuable assistance, and on the basis of the existing policies, by looking at the past commercial contracts, customs declarations, bank flows and other methods of these enterprises, we can use foreign reserves in a timely and appropriate manner to help them solve the problem of losing orders. So why buy orders instead of sending money? Because this can promote the full resumption of work and production as soon as possible. When the enterprise resumes normal operations, the wages and property income of employees, management and investors will continue to flow, which in turn will boost consumer domestic demand.
Member Jin Li stressed that it is very necessary to revitalize high-quality export enterprises, and if the impact of the epidemic does not exist, in addition to the loss of tangible assets, various intangible assets established for a long time, such as its goodwill abroad, popularity, and an orderly foreign supply chain formed after several years of running-in, will disappear.
On the question of how to digest these orders after the government purchases, Member Jin Li believes that the order materials obtained by the government through rescue enterprises can be distributed directly in the form of relief materials in China, part of which is used as a resource reserve for new public health infrastructure, and some of which is used to help countries along the Belt and Road.
Reserve foreign exchange is for unforeseen needs
Calculate the optimal scale of use to implement accurate assistance
What is the purpose, logic, and method behind enabling partial outages? Member Jin Li said: This year's "Government Work Report" proposes to innovate monetary policy tools that go directly to the real economy, strengthen financial support for stable enterprises, and do our best to help enterprises, especially small, medium,and small enterprises, and individual industrial and commercial households tide over difficulties. "The ultimate goal of 'enabling partial reserves' mentioned in both of my proposals is to solve the problem of threats to the 'survival' of individuals and enterprises in the context of the epidemic.
He said: The foreign exchange obtained from China's net exports (that is, exports exceeding the imported part) is handed over to the People's Bank of China through the settlement of foreign exchange by export enterprises, and the final balance is the state's foreign exchange reserves. At present, the total size of China's foreign exchange reserves is about 3 trillion US dollars, and the reserve foreign exchange behavior itself has a layer of purpose to respond to unexpected needs. Therefore, it is of great practical significance to conduct research on why, when and how to use the external reserve.
In his view, the epidemic superimposed on the domestic economic situation, the deterioration of the international economic environment, a small number of Western politicians irresponsibly sell the concept of "decoupling", the United States continues to unlimited quantitative easing and the continuous depreciation of US debt and many other unfavorable factors are in front of us, which is several superpositions. So don't use it at this time, when is it really "unforeseen"?
Member Jin Li mentioned that in view of the use of foreign reserves, some voices have proposed that it may cause the RMB exchange rate to fluctuate and have an impact on the capital market. Both of these possible outcomes are very worthy of attention, but we need to look at this issue from a longer-term perspective, because in fact, the impact of exchange rates and capital markets ultimately comes down to financial confidence in the country. Just like we do not set a growth target for GDP this year, in addition to the complexity of the internal and external situations can not be fully judged, it also reflects that we are not willing to be tied by short-term data, and do not want to use the "medicine of tigers and wolves" to stimulate long-term development.
He said that with the improvement of the quality of the people, although the people care about short-term figures when investing, from the trend point of view, they are more concerned about the government's long-term control of the economy, which is the embodiment of the modern national governance ability, how to let the people enhance the sense of gain, and truly appreciate the benefits of national governance. The people's sense of gain cannot be brought about by short-term figures, but employment, poverty alleviation and living environment can be. A hot word recently is "should be out", which is not only a guarantee of the government's response methods, but also an externalized embodiment of bottom-line thinking. If the exchange rate and capital market fluctuations due to the "partial use of foreign reserves" will cause some investors to not understand, but after a period of time, they will find that the market fundamentals will continue to improve, and there is no worse news than before.
Member Jin Li commented that frankly speaking, China's economic recovery at this stage is obviously faster than that of Europe and the United States. In the next few years, we are also likely to grow faster than the world. The exchange rate, whether it is the capital market price or the capital market, ultimately reflects the confidence of the fundamentals. Therefore, if we deal with it properly and the economy stabilizes, we will only "recover the lost ground" faster, and even make our economy enter a more practical and higher-quality development track.
So, how much external reserves are appropriate to use? Member Jin Li said: I think it is a very professional issue to calculate the optimal scale of utilization, which requires a large amount of official accurate data, and I hope that the state can study it according to the direction of the proposal and combine the data, and after fully balancing the considerations of all parties, it will come up with a part that can make the external reserves more secure and stable, and can benefit the people's livelihood at a critical moment, so as to help the economy recover. One of the most important principles is to provide the most accurate assistance to the most desperate people and enterprises where "survival" is a problem.
Source: China Youth Network