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China under the global financial crisis response strategy - especially Chinese Financial Forum 2009


									China under the global financial crisis response strategy - especially Chinese
Financial Forum 2009
Wang, Meng Qingfeng finishing Insurance Institute of China Network
   January 10, 2009, special Chinese Financial Forum successfully held in Beijing.
The theme of this forum in China under the global crisis response strategy by the
Chinese Academy of Social Sciences Forum Institute of Finance, China Insurance
Regulatory Commission Policy Research and the Special China co-sponsored
post-doctoral research station, Roland Berger Strategy Consultants, Hua property
Insurance Company co. Chinese Academy of Social Sciences researcher Li Yang,
director of Institute of Finance hosted the Forum, the NPC Financial and Economic
Committee Vice Chairman Wu Xiaoling, the World Bank East Asia and Pacific region,
chief financial experts Wang Jun, deputy director of the CASS Institute of Finance
Wang Songqi, China Insurance Regulatory Commission Chen, Assistant President of
the United States Fred Hu, Managing Director of Goldman Sachs Asia, Greater China
CEO Roland Berger regular Bo Yi and Beijing Institute of Special Chinese Finance
Professor Li Maosheng gave a keynote speech, respectively. Zheng Xinli, deputy
director of the Central Policy Research Office, the National Development and Reform
Commission land development and regional economic Xiao Jincheng, deputy director
of the Institute commented so to speak.
   The Forum postdoctoral guidance experts (in alphabetical order): Wang Yiming,
Wang Taiyuan, Wang Jun, Wang Jian, Wang Songqi, Lorraine Wang, Wang Duo,
Wang Wen, Wang Li, Lod of, Jian-Ping Shi, Tian Jin, Yuan Liu, Sun Haiquan, Mi
Jianguo, Hesheng Ming, Wu Xiaoping, Wu Xiaoling, Zhang Dongsheng, Guang-Rong
Li, Li Yang, Mao-Sheng Li, Xiao Jincheng, Exploration Engineering, Chen, Chen
Dong-sheng, Chen Xiwen, thoughtful Xu, Meng Yan, Zheng Xinli, Nanjing Ming,
Jiang Yang, Jian Hu , HU Zhao Guang, HU Man-chuen, Tang Shuangning, A Talk
Xuxin Zhong, Aohui Cheng, Jin Baoping, Yuan Li, Chuan-Jie, Liang Qi, Huang
Xiangping, Lai Xiaomin, Cai Esheng, Pan Chenguang, Huoxue Wen, Dai, and from
government financial regulation departments, other ministries, the business
community, the media, well-known universities and research institutes of special
guests, special Chinese post-doctoral post-doctoral research station more than 350
   Focusing on the theme "China under the global financial crisis, coping
strategies," the subject, on the following issues discussed in depth: the
global financial crisis, the United States and Western Europe, major changes in the
financial system and trends of this global financial crisis of rational thinking and
re-understanding of the crisis facing the Chinese economy under the difficulties and
problems in China under the global financial crisis response strategies.
   First, the financial crisis the United States and Europe to many major changes in
the financial system has undergone
   United States, Fred Hu, Managing Director of Goldman Sachs Asia that the crisis
lasted longer, pervasiveness, against destructive large indeed with 1929 ~ 1933
compared to the Great Depression, many important phenomena, issues need our
attention, we need to learn. Now that the crisis should be at the third stage. The first
stage is the initial crisis, starting from February 2007 until February 2008; the second
phase is from March 2008 until September 2008; third stage is from after October
2008. This is from the spread of the crisis itself, the extent and nature of deterioration,
evolution to changes in the way governments for disposal of the.
   Currently, the third phase, still have great uncertainty, despite their banks made
Henduo response measures, investment and a lot of structured products, Dan the
credit market, stock market has Meiyou full recovery, Feichangdimi. Global
commodity markets including crude oil, natural gas, precious metals, currency
fluctuations are rapid, there are many uncertainties. Can be said that the financial
crisis has seriously hit the real economy, the world's major economies, the
United States, European Union, Japan's economic recession, the major
emerging market, India, Russia, Brazil, South Korea, are suffering heavy losses, it is
impossible in the short term. But I can see is that by adjusting the Western financial
system, reorganization, shrinking the balance sheet of assets and liabilities during a
variety of ways such as self-recovery. There are three more important trend is
beginning to emerge.
   One of the trends: under crisis, the financial sector and further mergers and
This could see many important cases, in the United States, JP Morgan Chase
acquisition of Bear Stearns, the rich in the fourth quarter acquisition of the
Washington Department of Banking. In Europe, the UK's biggest mortgage
bank acquired another bank. Germany's second-largest bank and third
largest bank mergers and acquisitions, Paris, France, Fortis Bank and National Bank
merger. Financial Institutions Merger trend is global, and very obvious. Western
financial system was already very high market concentration, through the crisis much
higher concentration.
   The second trend: the crisis under the nationalization of the financial industry to
speed up the process of
   Originally a market economy country, the financial sector on behalf of the core of
the market economy should be free competition, characterized by private property.
Financial crisis, the United States, United Kingdom, continental Europe to start the
universality of the government holding shares or financial institutions. The first start
is the British government supervision from a bank, the United States began to take
over two rooms institutions, AIG. Britain's Royal Bank of Scotland shares
Holdings, Fortis Bank, etc. there. Switzerland, UBS is holding the government
authorities. After the outbreak of the crisis, government equity participation and
holding of financial institutions is forced, helpless, reluctant, is the confidence crisis,
collapse of the case, in order to stabilize the financial system before taking this step.
   Needless to say, this nationalization is temporary, transitional, not permanent. This
program can be seen from the shares is very clear. Basically, a tool rarely used
common stock, most of them are preferred. Start time of the payment of interest rate
is relatively low, if not more than five years, financial institutions ability to repay,
then pay interest rates of more than 5%. Its purpose is to encourage financial
institutions to become more robust in this way, the taxpayers money back as soon as
the government.
   The third trend: the crisis under the enhanced financial supervision
   Since 1984, the world's financial regulatory provisions of the Basel
Accord, basically as the regulatory system, which is a very good basis, the effect is
also very good. However, there are many defects in this regulation, the focus on
liquidity risk and counterparty risk constraints.
Today, a systemic financial crisis, not a Securities Regulatory Commission or the
Insurance Regulatory Commission and China Banking Regulatory Commission alone
can handle. The central bank as lender of last resort from the macro level how the
coordination, which has caused concern. Paulson in late 2006 proposed a blueprint for
financial reform in the United States, which refers to the United States needs a unified
regulatory system for macro-control unit, he was recommended to the Fed as a
regulator on the core. He also mentioned that a global monitoring. In
today's era of globalization, global coordination and monitoring how the
British Prime Minister Gordon Brown made the second Bretton Woods system, want
to do a global regulation. But this needs to be seen.
   Second, this global financial crisis awareness and rational thinking and re-
   (A) how awareness of the crisis
   World Bank East Asia and Pacific region, chief financial expert Wang Jun, admitted
in his keynote address, this financial crisis to the impact of large countries,
unprecedented, vast majority of Wall Street banks and national regulators do not
respond to the Great Depression of the last financial experience, know very place.
   Wang Jun, specifically in China, there is even more worrying things. Large number
of officials and scholars, on the financial crisis in the United States, a respected
financial regulatory system was the kingdom of knowledge is too simple, or even that
China's financial regulatory system is superior than the West. These
findings give the impression that our current financial supervision is the best in the
world. In fact, we learn from the West, especially to the United States has not
completed the learning process. Innovations in financial instruments such as factoring,
reverse factoring, according to Internet e-factoring, financing of SMEs in solving
these are very important.
   (B) where the development of the crisis will
   The current financial crisis in the end will be where to develop? Everybody said he
has no bottom. From the intuitive point of view, through this crisis will be very
difficult. The banking sector, the normal situation has been very difficult to lend to the
thousands of businesses, industries have repayment ability and the will of the people
singled out repayment easier said than done, are filled with the next in the normal
kinds of risk, under the crisis, good business is not so good, and bad business has been
worse, the situation more difficult. Some economists predict that China after the first
quarter of 2009, "V" type inflection point will appear, Wang Jun
saying that this is too optimistic, this global financial crisis will last a very long time.
Issued from the domestic financial 30 also do not see the hope of reversing the trend.
Now stop to consider China's economic growth forecast to 7%, 8%, which
is unrealistic, but should not be.
   Wang Jun also believes that the current financial crisis is still spread, we must adapt
to this trend, should make some real closure of insolvent enterprises and banks, and
then let the new mechanism established. But this is not easy, in general, in times of
crisis should take "counter-cyclical" policy, but the words of the
next three to five years effective, then what order to the crisis,
"counter-cyclical" to the time to take more rigorous, prudent
policies, the situation more difficult. Bank regulators, financial policy makers are not
allowed to adopt a "countercyclical" policy.
   (C) the impact of the crisis, to what extent
   Roland Berger, President Greater China, Mr. Chang Yi Bo that the impact of the
crisis, the next step there is the possibility of continued deterioration. Primary reason
is that the real estate recession, particularly in the United States, its duration and depth
can not expect. Second, the financial leverage to a large extent led to the rapid
expansion of real estate, in the end how much of this leverage, what point in the
balance, or need to be observed. There are many financial institutions and banks
through loans to acquire assets, the market value of their losses are still not
completely exposed.
   Indeed the future is full of a lot of unknown, although we know that this crisis will
not lead to as large in 1929 ~ 1933, as the impact of depression, because national
welfare system and security system were complete than many, but many still
unknown. Also, as leverage in reverse cycle operation, the future will be inflation or
deflation, there are many unpredictable factors, including the national Government to
increase spending and inject liquidity, a lot of measures on the potential impact of
future inflation, is also unknown. In the future if the real estate market downturn, they
will continue to drag on the economy, now is hard to predict, as the crisis continues to
   (D) whether the crisis more than 1,933 years the Great Depression
   Chinese Academy of Social Sciences researcher Wang Songqi, deputy director of
Institute of Finance, that this crisis has demonstrated the impact of the last major
crisis, compared can find some worthy of thought. 1929 ~ 1933, the crisis was no
system of national accounts, there is no such indicators GDP, the U.S. economy is the
best time to 1929, when the country's national income to 87 billion U.S.
dollars, to 1930 is 75 billion U.S. dollars, 1931 in 69 billion U.S. dollars, 42 billion
U.S. dollars in 1932, 1933, fell to low is 39 billion U.S. dollars. Unemployment rate,
the U.S. employed population in 1929 to 4 5 million, to 1933, the national
unemployment is at 1 400 million, the unemployment rate nearly 1 / 3. The current
financial crisis, the U.S. unemployment rate is now less than 8%, the United States
actually have a sound social security system, with a very comprehensive policy
system. There is also a more coordinated global unified anti-crisis actions.
   Summing up, we may determine, this crisis was not like 1929 ~ 1933, the crisis so
great. The whole social security system, crisis response capabilities, national
infrastructure, including "Obama Maxin Zheng", all reference
to the time when Roosevelt's experience, and certainly more than
Roosevelt's place. Therefore, the crisis appears to reverse after 2010.
    (E) the root of the crisis in the end what is
    Zheng Xinli, deputy director of the Central Policy Research that the longer the
financial crisis, it needs at least two years before they may be bottoming out warmer.
The root causes of this financial crisis issue. Recently some Western economists have
a view that the root causes of the financial crisis in China, they put the United States
subprime mortgage crisis caused by the financial crisis was due to Lai to
China's head. U.S. economist Joseph Stiglitz on the causes of the financial
crisis has a clear judgments, and that is the government's economic policy
errors, the performance of one of its blind worship of the market that the market can
self-repair; Second, the financial derivatives Commodities lack of supervision.
American system of banking supervision should be said that it is quite perfect, but the
regulation of financial derivatives is a blank. Some men of insight to make
recommendations to the Government on many occasions regulation of financial
derivatives, but whenever the regulation of financial derivatives such laws in
parliament, when the United States, Freddie Mac, Fannie Mae, the conduct of these
interest groups lobby, and finally to the law can not be passed, the lack of regulation is
an important reason leading to the financial crisis.
    Zheng believes that the root causes of the financial crisis lies in the monetary policy
mistakes. Monetary policy, focusing only on low interest rates, did not think was due
to low interest rates caused imports of cheap Chinese products, the use of funds in
China has brought low interest rates. U.S. newspaper that the crisis stems from
developing countries, the BRICs, especially China. For this view we have to be
rejected, they say this may have some purpose. April 2009 the Group of 20 summit
will be held the summit to formulate some measures to reform the international
financial and monetary system. This contradiction is not trying to blame the Chinese
head for China to assume more responsibility to pressure the Chinese to pay the
financial crisis for the United States do? For this we must have a clear understanding.
    (Turn next)
    Source: "Insurance of" No. 3, 2009

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