＂Striving for a New Journey and Building a New Era＂ The financial industry is moving towards high-quality development
Source: Economic Daily
Since the 18th National Congress of the Communist Party of China, China’s financial reform and development has made great achievements, the financial industry has maintained rapid development, the structural reform of the financial supply side has been deepened, and the comprehensive strength of the financial industry has been further enhanced. At present, China has formed a comprehensive and competitive financial institution system covering banking, securities, insurance, funds, futures and other fields, and basically established a modern financial market system suitable for Socialism with Chinese characteristics.
The modern financial system has been basically completed.
At the end of 2021, the total assets of China’s financial institutions were 381.95 trillion yuan, of which the total assets of banking institutions were 344.76 trillion yuan; The total assets of securities institutions are 12.3 trillion yuan; The total assets of insurance institutions are 24.89 trillion yuan. At the end of 2011 ten years ago, the total assets of China’s banking institutions were only 113.3 trillion yuan.
With the development of high-quality economy, China’s financial market has become more mature, and a financial market system with complementary functions, multi-level trading venues and diversified trading products has been gradually established, and the ability to allocate resources and serve the real economy has been continuously enhanced.
At present, China has basically established a financial service system aimed at serving the real economy and benefiting the people. China’s financial services are constantly enriched, and the convenience and inclusiveness of basic financial services such as deposit and loan, payment and settlement, wealth management and investment, and information inquiry are at the forefront of the world. The registration, custody, clearing, settlement, credit reporting and rating systems of the financial market are basically sound, and the financial infrastructure is constantly improving.
China’s multi-level, wide-coverage and differentiated financial system has initially taken shape. The variety of financial institutions is complete and the competition is full. The continuous innovation and development of capital market, insurance market, money market and foreign exchange market has become an important foundation for the coexistence and common prosperity of finance and the real economy. In recent years, the capital market has been comprehensively deepened, and the reform of the stock market registration system has made a breakthrough. Small and medium-sized boards, Growth Enterprise Market and New Third Board have been established successively. In June 2019, the Shanghai Stock Exchange launched the science and technology innovation board to explore the reform of the stock market registration system. In November 2021, the Beijing Stock Exchange opened, the construction of multi-level capital market was more perfect, and the construction of market basic system was continuously strengthened.
At the same time, the bond market has developed rapidly and its scale has steadily increased, playing an increasingly important role in the asset allocation of international investors. In recent years, the scale of China’s stock market and bond market has steadily increased, ranking second in the world. In 2021, China’s bond market issued a total of 61.9 trillion yuan of bonds, an increase of 8% over the previous year. By the end of 2021, the annual turnover of Shanghai and Shenzhen stock markets reached 258.0 trillion yuan, and the balance of bond market custody reached 133.5 trillion yuan.
The quality and efficiency of financial services have been comprehensively improved.
Since the 18th National Congress of the Communist Party of China, the financial industry has insisted on returning to its original source, comprehensively improved the quality and efficiency of serving the real economy, and allocated more financial resources to key areas and weak links of economic and social development such as small and micro enterprises, "agriculture, rural areas and farmers", emerging industries, and environmental protection, so as to meet the reasonable and effective financing needs of market participants and promote the transformation and adjustment of the national economy and a virtuous cycle of development. Dong Ximiao, chief researcher of Zhaolian Finance, said that in recent years, the scale of the financial industry has grown rapidly, financial technology has flourished, innovations in financial products and services have emerged one after another, and the ability of financial services to the real economy has improved.
At present, China’s basic financial services have basically achieved full coverage. By the end of 2020, the coverage rate of banking outlets in towns and villages nationwide reached 97.13%, and the coverage rate of village-level administrative districts with payment services reached 99.31%, basically realizing that there are institutions in towns and villages, services in every village and accounts in every family. At present, serious illness insurance has covered 1.22 billion urban and rural residents, and agricultural insurance has provided 4.7 trillion yuan of risk protection for 180 million households. The efficiency and level of economic and social development of financial services have been steadily improved. The financial system runs the new development concept through the whole process of financial reform and development, and comprehensively serves the high-quality development of the economy and society.
The financial services of private enterprises and small and micro enterprises continued to improve. Since the 18th National Congress of the Communist Party of China, the financial industry has adhered to the concept of shared development, built a characteristic inclusive financial system, and strived to improve the coverage, availability and satisfaction of financial services. The financing of private enterprises and small and medium-sized enterprises presents a good trend of "increasing in quantity, expanding in area and decreasing in price". At the end of January 2022, the balance of Pratt & Whitney small and micro loans was 19.7 trillion yuan, a year-on-year increase of 25.8%; The number of micro-credit households in Pratt & Whitney increased to 48.13 million, a year-on-year increase of 45.5%. In 2021, the average interest rate of new loans for small and micro enterprises was 4.93%, which was 22 basis points lower than the annual level in 2020.
As the blood in the economic operation system, the financial industry has become an important support and powerful guarantee for tackling poverty. Since the beginning of the fight against poverty, 9.2 trillion yuan of financial precision poverty alleviation loans have been issued, more than 710 billion yuan of poverty alleviation micro-credit has been issued, and 668.8 billion yuan of poverty alleviation re-loans have been issued.
Adhere to the concept of green development and gradually improve the green financial system. At the end of 2021, the balance of local and foreign currency green loans was 15.9 trillion yuan, up 33% year-on-year, 12.7 percentage points higher than the end of last year, 21.7 percentage points higher than the growth rate of various loans, and the annual increase was 3.86 trillion yuan, ranking first in the world in terms of stock scale.
Opening to the outside world has entered a new stage.
Since the 18th National Congress of the Communist Party of China, the financial industry has entered a new stage of opening to the outside world, and basically established a management system of national treatment plus negative list before foreign investment access, treating domestic and foreign investors equally, greatly expanding the financial industry’s opening to the outside world, and accelerating the formation of a two-way open financial system. Chen Yulu, deputy governor of the People’s Bank of China, said that in recent years, China’s financial industry has made breakthrough progress. The People’s Bank of China, together with other financial supervision departments, announced more than 50 measures for opening to the outside world, and the degree of two-way opening of financial markets has been continuously improved, making important efforts to realize China’s high-level opening and maintain an open world economic system.
In recent years, the pace of China’s financial industry opening to the outside world has obviously accelerated, and a number of opening-up measures have quickly landed. The restrictions on the proportion of foreign ownership in banking, securities, fund management, futures and personal insurance were completely abolished, and the scope of exhibition industry was greatly relaxed; Foreign nationals have been given national treatment in the fields of enterprise credit investigation, credit rating, payment and settlement; The two-way opening of the capital market continues to expand, and the supporting systems such as accounting, taxation and trading are gradually in line with international standards.
Foreign financial institutions actively and orderly entered the China market, showing a situation of "a hundred flowers blossom". According to statistics, since 2018, China has approved foreign capital to set up more than 100 banks and insurance institutions, 12 foreign-controlled (including wholly-owned) securities, fund management and futures companies, and 6 credit investigation, rating, payment and clearing institutions for foreign-funded enterprises. By the first half of 2021, foreign banks had set up 41 foreign-funded corporate banks, 115 branches and 139 representative offices in China, with a total of 930 business institutions and total assets of 3.73 trillion yuan. Overseas insurance institutions have set up 66 foreign-funded insurance institutions, 85 representative offices and 17 insurance professional intermediaries in China.
The opening of financial markets is conducive to China’s high-quality economic growth, and it is also conducive to global investors to share the fruits of China’s economic development. In recent years, China has continuously promoted the opening of the bond market, stock market and financial derivatives market in accordance with international standards, expanded cross-border investment and financing channels, and improved relevant institutional arrangements. In 2020, the quota restrictions for Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII) will be completely abolished. In 2014 and 2016, Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect were opened one after another. In 2019, Huluntong was officially launched, and in 2021, the pilot of cross-border wealth management was launched. The investment channels of domestic and foreign investors are constantly expanding.
In September 2019, A shares were officially included in the S&P Emerging Markets Global Benchmark Index, indicating that all three international indexes have included A shares. In October, 2021, after FTSE Russell officially included China government bonds in FTSE government bond index, China government bonds were also successfully included in the three major bond indexes in the world.
With China’s opening up to the outside world entering a new stage, foreign-funded institutions have full confidence in RMB assets and strong allocation, and the demand for RMB assets has increased significantly. According to the official foreign exchange reserve currency composition (COFER) data released by the International Monetary Fund recently, in the fourth quarter of 2021, the proportion of RMB in COFER rose again, setting a new high since the fourth quarter of 2016. The proportion of RMB in global foreign exchange reserves rose from 2.66% in the third quarter of last year to 2.79%, ranking fifth in the world. (Economic Daily reporter Chen Guojing Yu Yong Peng Jiang)
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