When it comes to deleveraging, some people will contact the Bank of China to tighten liquidity and reduce corporate debt, which will lead to a decline in economic growth. Hu Xiaolian, chairman of The Export-Import Bank of China, saw the dialectical relationship between them. "De-leveraging does not necessarily mean a decline in economic growth, and economic growth does not necessarily depend on adding leverage." She believes that as an important part of supply-side structural reform, several ways of deleveraging in China actually have a positive effect on economic growth, and deleveraging and steady growth are not antagonistic.
The reform of state-owned enterprises, the reduction of fees and taxes, and the strengthening of capital market construction have not only achieved the goal of deleveraging, but also "strengthened the body" for China's economy. "At present, promoting the reform of state-owned enterprises, strengthening corporate governance and strengthening financial hard constraints in China have played a great role in improving the economic benefits of enterprises." Hu Xiaolian said that improving economic efficiency and using resources more effectively are very important for economic growth.
At the same time, "the government's large-scale tax reduction and fee reduction is also conducive to deleveraging, which can effectively reduce the burden on enterprises and enhance their solvency, and is also conducive to the growth of corporate capital equity financing strength." She said.
China is vigorously strengthening the capital market construction. Hu Xiaolian pointed out that this has two advantages: first, it can increase the proportion of equity financing, and second, it can play a positive role in effectively handling existing debts. Trading and disposing of existing debts through market-oriented methods is also conducive to reducing the debt burden of enterprises.
"Last year, the proportion of China's debt to GDP was declining, and the supply-side reform also brought positive effects." Xuan Changneng, deputy director of the State Administration of Foreign Exchange, also believes that there are many measures to deleverage, one of which is to reduce the leverage ratio of non-financial enterprises in China and optimize their debt structure through debt-to-equity swap. Great progress has been made in this regard.
Xuan Changneng believes that, on the whole, China has enough room to take measures to deleverage, so as to manage the whole debt level.
How high is the debt level? Is there a quantitative "degree" of the overall social debt? In this regard, Xie Zhong, Chairman of the Inter-bank Market Clearing House Co., Ltd. provides a new perspective-"The stronger the sustainability of debt, the higher the tolerance for debt."
The first factor that affects the sustainability of the overall social debt is cost. Xie Zhong pointed out that "flood irrigation" is definitely not feasible, and "sudden braking" is also not feasible. Relevant structures need to be adjusted to reduce costs. Direct financing and issuing bonds are very important, which is more conducive to reducing costs than indirect financing. This market has a very large room for growth.
From the perspective of the bond market, to meet the long-term development, it is necessary to further enrich its tool varieties. "At present, one of the shortcomings of the bond market is the lack of derivatives to hedge risks. China now has a certain scale of interest rate derivatives and exchange rate derivatives, but the proportion in the world is still low. " Xie Zhong believes that the existing credit risk mitigation tools are mainly aimed at private enterprises, and more mature foreign derivatives such as credit default swaps can be considered in the future. On the issue of encouraging overseas institutions to participate, there are also coordination issues such as cross-border supervision that need to be further studied and solved.
Improving market liquidity is also one of the key points to reduce costs. Last year, the People's Bank of China launched a bond financing support tool for private enterprises. Xie Zhong said that the implementation effect of this credit risk mitigation tool for private enterprises is very good, which is equivalent to an insurance product, enhancing the credibility of private enterprises in issuing bonds and playing the role of credit insurance, thus improving the acceptance of private enterprise bonds. "Increased acceptance, active trading and active market liquidity."
While promoting active trading, we should also improve the exit mechanism. As early as last year, Pan, deputy governor of the People's Bank of China, proposed to launch a trading mechanism for expired and defaulted bonds as soon as possible. "If investors are unwilling to participate in the debt restructuring of bond issuers, they can withdraw through transactions." According to Xie Zhong, the Shanghai Stock Exchange and relevant institutions are currently making technical and business preparations for the default bond trading system.
(Article Source: shanghai securities news)