Zheng Zhi­jie: Sup­port­ing Three Crit­i­cal Bat­tles with High-qual­ity Fi­nan­cial Work

Fore­stalling and de­fus­ing ma­jor risks, tar­geted poverty al­le­vi­a­tion and tack­ling pol­lu­tion are all closely con­nected to fi­nance work and fi­nan­cial in­sti­tu­tions.

China Pictorial (English) - - CONTENTS - Text by Wang Shuo

“The ‘three crit­i­cal bat­tles’ are fore­stalling and de­fus­ing ma­jor risks, tar­geted poverty al­le­vi­a­tion and tack­ling pol­lu­tion—key hur­dles that China must over­come at the cross­roads of build­ing a mod­er­ately pros­per­ous so­ci­ety in all re­spects and pre­req­ui­sites for the re­al­iza­tion of China’s high-qual­ity eco­nomic de­vel­op­ment that is bal­anced, co­or­di­nated and sus­tain­able,” de­clares Zheng Zhi­jie, a mem­ber of the Na­tional Com­mit­tee of the Chinese Peo­ple’s Po­lit­i­cal Con­sul­ta­tive Con­fer­ence (CPPCC), deputy Party sec­re­tary, vice chair­man and pres­i­dent of the China De­vel­op­ment Bank (CDB) and a fi­nance vet­eran with pro­found in­sight on how fi­nance can fuel the three crit­i­cal bat­tles.

His 30-plus years in eco­nomics and fi­nance have given Zheng rich pro­fes­sional ex­pe­ri­ence and pro­found the­o­ret­i­cal knowl­edge. As a schol­arly man­ager, he has pub­lished books in­clud­ing Ap­proach­ing global quan­ti­ta­tive Ea sing pol­icy and The le­gal is­sues and Prac­ticeof “Go­ing­global” and serves as a part-time pro­fes­sor at Nankai Univer­sity, one of the most pres­ti­gious in­sti­tu­tions of higher learn­ing in China.

“Some risks still per­sist amidst China’s eco­nomic and so­cial de­vel­op­ment, es­pe­cially in eco­nomic and fi­nan­cial fields,” Zheng says. “If we take these con­cerns lightly and deal with them in­ef­fec­tively, they will be­come ma­jor risks and trig­ger a but­ter­fly ef­fect.”

The first bat­tle is to fore­stall and defuse ma­jor risks. Par­tic­i­pants of the 2017 Cen­tral Eco­nomic Work Con­fer­ence stressed that fi­nan­cial risk con­trol is still a pri­or­ity in the bat­tle to defuse ma­jor risks.

In this re­gard, Zheng be­lieves it nec­es­sary to com­bine “plug­ging” and “dredg­ing” mea­sures in fi­nan­cial work.

Pol­i­cy­mak­ers need to shut the “side

Only by win­ning these three crit­i­cal bat­tles will we earn the recog­ni­tion of the peo­ple for our work to build a mod­er­ately pros­per­ous so­ci­ety in all re­spects.

door” by rais­ing risk aware­ness, res­o­lutely crack­ing down on il­le­gal fi­nan­cial ac­tiv­i­ties, strength­en­ing reg­u­la­tions cov­er­ing weak links and pre­vent­ing and con­trol­ling var­i­ous eco­nomic bub­bles.

At the same time, pol­i­cy­mak­ers should open the “front door” by im­prov­ing the fi­nan­cial sec­tor’s ca­pa­bil­i­ties to serve the real econ­omy, pro­mot­ing the healthy de­vel­op­ment of multi-level cap­i­tal mar­kets and en­cour­ag­ing the de­vel­op­ment of in­clu­sive fi­nance, high­tech fi­nance and green fi­nance.

“Only by win­ning these three crit­i­cal bat­tles will we earn the recog­ni­tion of the peo­ple for our work to build a mod­er­ately pros­per­ous so­ci­ety in all re­spects,” Zheng says. “This ac­com­plish­ment would go down in his­tory, pro­mote deep re­form of qual­ity, ef­fi­ciency and driv­ing forces of de­vel­op­ment and lay a solid foun­da­tion for the con­struc­tion of a great mod­ern so­cial­ist coun­try.”

Zheng closely links the three crit­i­cal bat­tles to fi­nan­cial work and fi­nan­cial in­sti­tu­tions. He be­lieves that the CDB, as a de­vel­op­ment fi­nan­cial in­sti­tu­tion, should play a big­ger role as fol­lows:

First, the bank should serve na­tional strate­gies in a mar­ket-ori­ented way. We should serve as a safe­guard that pre­vents sys­temic fi­nan­cial risks, help lo­cal gov­ern­ments prop­erly han­dle debt prob­lems and open a stan­dard­ized “front door” for debt fi­nanc­ing to serve the healthy de­vel­op­ment of lo­cal economies.

Sec­ond, the bank should con­tinue work­ing on cap­i­tal-guar­an­teed fi­nan­cial projects with mea­ger prof­its. Re­ly­ing on na­tional credit sup­port, we raise long-term and sta­ble funds. By us­ing var­i­ous de­vel­op­ment fi­nan­cial tools, we can pro­vide long-term, sta­ble and low­cost fi­nan­cial sup­port for ar­eas in need of tar­geted poverty al­le­vi­a­tion as well as pol­lu­tion preven­tion and con­trol.

Third, the bank should in­no­vate ideas and meth­ods. So far, the CDB has is­sued loans of 1.36 tril­lion yuan (US$215 bil­lion) for tar­geted poverty al­le­vi­a­tion projects, cov­er­ing 983 na­tional and pro­vin­cial poor coun­ties.

Fol­low­ing the work­ing mech­a­nism in which the cen­tral gov­ern­ment is re­spon­si­ble for holis­tic plan­ning, provin­cial­level gov­ern­ments re­spon­si­ble for over­all su­per­vi­sion, and mu­nic­i­pal and county-level gov­ern­ments re­spon­si­ble for im­ple­men­ta­tion, we have cre­ated a “three in­te­gra­tions” con­cept by in­te­grat­ing cap­i­tal sources, sys­tems and so­lu­tions to pro­vide fi­nanc­ing sup­port, es­tab­lished mech­a­nisms for vir­tu­ous cir­cu­la­tions of funds and en­hanced in­ter­nal driv­ers of poverty al­le­vi­a­tion. Next, we will ex­plore more ef­fec­tive pat­terns and prac­tices.

Fourth, the bank must strengthen com­pre­hen­sive ser­vices. By cap­i­tal­iz­ing on the com­pre­hen­sive ad­van­tages of the CDB in equity, loans, debt fi­nanc­ing, fi­nan­cial leas­ing, port­fo­lio in­vest­ment and us­age of a va­ri­ety of fi­nan­cial prod­ucts, we will pro­vide di­ver­si­fied fi­nan­cial ser­vices for the de­vel­op­ment of the real econ­omy.

Zheng Zhi­jie, mem­ber of the Na­tional Com­mit­tee of the Chinese Peo­ple’s Po­lit­i­cal Con­sul­ta­tive Con­fer­ence, deputy Party sec­re­tary, vice chair­man and pres­i­dent of the China De­vel­op­ment Bank and a fi­nance vet­eran, has pro­found in­sight on how fi­nance can fuel the three crit­i­cal bat­tles. by Chen Jian

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