Industry Research | Regarding finance, the government work report says so

On the morning of March 5th, the highly anticipated government work report was released, setting the expected economic growth target for this year to be around 5% of GDP growth. Achieving this year's expected goals is not an easy task, and requires policy focus, double efforts in work, and concerted efforts from all parties. Finance is the lifeblood of the real economy. This year's government work report mentions finance 21 times, 2 more than last year; Mention insurance 5 times and capital market 1 time. What achievements and future development directions of financial work, as well as financial related proposals, are covered in the government work report? This article will organize answers for you.

Looking back at the past

In the past year, achievements in the financial sector have been concentrated in areas such as system risk resolution, financial and tax reforms, and financial unit inspections.

Over the past year, solid progress has been made in comprehensively building a socialist modernized country. Consolidate and solidify the foundation for safe development. The grain production reached a new historical high of 1.39 trillion catties. Stable supply of energy resources. Enhancing the independent and controllable capabilities of important industrial and supply chains. The risks in key areas of economy and finance have been steadily resolved. The construction of modern infrastructure continues to strengthen.

Over the past year, we have intensified macroeconomic regulation and promoted sustained improvement in economic performance. Optimize real estate regulation through urban policies, promote the reduction of mortgage costs, and actively promote the work of ensuring the delivery of buildings. We have formulated and implemented a comprehensive plan to resolve local debts, classified and disposed of financial risks, and maintained the bottom line of preventing systemic risks.

In the past year, we have deepened reform and expanded opening up, and continuously improved the business environment. Deepen reform and expand opening up, and continuously improve the business environment. Deepen reforms in areas such as finance, taxation, agriculture and rural areas, and ecological and environmental protection.

In the past year, we have comprehensively strengthened government construction, vigorously improved governance efficiency, strengthened party conduct and clean governance, and fought against corruption. Strictly implement the spirit of the central eight point regulations, continuously rectify the "four winds", and effectively promote the inspection and rectification work of financial units, state-owned enterprises, and other institutions. Innovate and improve grassroots governance in urban and rural areas.

Looking ahead to the future

The report clarifies the overall economic and social requirements and development policy orientation for 2024, and emphasizes five major financial articles. At specific levels, we will continue to deepen reforms in the financial, tax, and financial sectors, prevent and resolve risks in key areas, improve financial mechanisms to support green development, and strengthen the role of financial policies in stabilizing employment.

A prudent monetary policy should be flexible, moderate, precise, and effective. Maintain reasonable and sufficient liquidity, and ensure that the scale of social financing and money supply match the expected goals of economic growth and price levels. Strengthen the dual adjustment of total quantity and structure, activate stock, improve efficiency, and increase support for major strategies, key areas, and weak links. Promote stable and moderate reduction in the cost of comprehensive social financing. Smooth the transmission mechanism of monetary policy and avoid the accumulation and idle transfer of funds. Enhance the inherent stability of the capital market. Maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Vigorously develop technology finance, green finance, inclusive finance, pension finance, and digital finance. Optimize supporting measures such as financing, credit enhancement, risk sharing, and information sharing to better meet the financing needs of small and medium-sized enterprises.

We will steadfastly deepen reforms and enhance the endogenous driving force for development. Promote reforms in areas such as finance, taxation, and finance. Build a leading area for the reform of a high-level socialist market economy system. Plan a new round of financial and tax system reform, implement the deployment of financial system reform, and increase financial and tax support for high-quality development. Deepen the reform of power, oil and gas, railways, and comprehensive transportation systems, and improve the regulatory system and mechanism for natural monopoly links. Deepen reforms in social and livelihood areas such as income distribution, social security, healthcare, and elderly care services.

Better coordinate development and security, effectively prevent and resolve risks in key areas. When introducing the government's work tasks for this year, the Premier proposed to better coordinate development and security, effectively prevent and resolve risks in key areas. Adhere to promoting high-level security through high-quality development, ensuring high-quality development through high-level security, addressing and resolving risks in real estate, local debt, small and medium-sized financial institutions, and maintaining overall economic and financial stability.

Handle risks and hazards in a safe and orderly manner. Improve the overall coordination mechanism for major risk disposal, strengthen the main responsibility of enterprises, departmental supervision responsibility, and local responsibility, enhance disposal efficiency, and firmly guard the bottom line of preventing systemic risks. Optimize real estate policies and provide equal support for the reasonable financing needs of real estate enterprises with different ownership systems, promoting the stable and healthy development of the real estate market. We will coordinate the resolution of local debt risks and stable development, further implement a comprehensive debt restructuring plan, properly resolve existing debt risks, and strictly prevent new debt risks. We will steadily promote the risk management of small and medium-sized financial institutions in some areas. Strictly crack down on illegal financial activities.

Establish a long-term mechanism for risk prevention and control. Adapt to the trend of new urbanization development and changes in the supply and demand relationship of the real estate market, and accelerate the construction of a new model for real estate development. Increase the construction and supply of affordable housing, improve the basic systems related to commercial housing, and meet the rigid housing needs and diversified improvement housing needs of residents. Establish a government debt management mechanism that is compatible with high-quality development, improve the comprehensive local debt monitoring and supervision system, and promote the transformation of local financing platforms by classification. Establish a sound financial regulatory system and enhance financial risk prevention and control capabilities.

Strengthen the construction of security capabilities in key areas. Improve the grain production, storage, and processing system, and comprehensively consolidate the foundation of grain security. Promote the construction of the national water network. Strengthen energy and resource security guarantees, and increase exploration and development efforts for oil, gas, and strategic mineral resources. Accelerate the construction of a major country reserve system and strengthen the construction of key reserve facilities. Improve network, data, and other security capabilities. Effectively maintain the security and stability of the industrial and supply chains, and support the smooth circulation of the national economy. Strengthen the construction of ecological civilization and promote green and low-carbon development. Vigorously develop a green and low-carbon economy. Promote the green transformation of industrial structure, energy structure, transportation structure, and urban-rural construction development. Implement a comprehensive energy-saving strategy and accelerate energy-saving and water-saving transformation in key areas. Improve financial, taxation, investment, pricing policies, and related market-oriented mechanisms to support green development, promote the development of waste recycling industry, promote the research and application of advanced technologies for energy conservation and carbon reduction, and accelerate the formation of a green and low-carbon supply chain. Build a leading area for beautiful China and create a highland for green and low-carbon development.

Effectively ensuring and improving people's livelihoods, strengthening and innovating social governance. Take multiple measures to stabilize employment and promote income growth. Employment is the most basic livelihood. We should highlight the priority orientation of employment, strengthen the support of fiscal, tax, financial and other policies for stabilizing employment, and increase the strength of special policies to promote employment. Implement and improve policies such as stable job returns, special loans, employment and social security subsidies, and strengthen support for industries and enterprises with large employment capacity. It is expected that there will be over 11.7 million college graduates this year. We need to strengthen policies and measures to promote youth employment, and optimize employment and entrepreneurship guidance services.

Financial work related proposals

Technology Finance: According to Caixin News, during this year's two sessions, Lin Jianhua, a National People's Congress representative and Party Secretary and President of the Hubei Provincial Branch of the People's Bank of China, proposed suggestions to support the accelerated development of technology finance. Lin Jianhua suggests strengthening information integration and sharing at the national level, and building a unified technology innovation supply chain platform; Improve the financial service system for investment and loan linkage, support eligible local legal person banks to establish wealth management subsidiaries, and expand internal investment and loan linkage businesses. In Lin Jianhua's view, financial support for technological innovation is a long-term and systematic project that requires deepening the structural reform of the financial supply side to form a financial service system that is more suitable for the financing needs of various technology-based enterprises. At present, there is still a certain gap between the work of technology finance and this goal. From the perspective of bank credit support, the problem of not understanding, not understanding, and not daring to lend to technology-based enterprises is still quite prominent, mainly due to the "three mismatches". This includes a mismatch between information supply and demand, a mismatch between financial service capabilities and the professionalism of technological innovation, and a mismatch between the returns and risks of science and technology innovation loans.

To address the constraints on the development of technology finance and better serve the implementation of the innovation driven development strategy, Lin Jianhua proposes four suggestions, including strengthening information integration and sharing at the national level and building a unified technology innovation supply chain platform. Suggest connecting the existing information platforms of relevant departments, integrating technology, industry, and financial information, building an integrated information sharing platform network, and promoting technology aggregation, industrial transformation, and fund aggregation. The platform network provides financial institutions with basic information, credit information, research and development information, intellectual property and technology transaction information, as well as production and operation information of technology-based enterprises, on the premise of compliance with laws and regulations and compliance with confidentiality management requirements. Authoritative experts are organized to evaluate and predict the prospects of technology projects based on various information, helping financial institutions understand and grasp the operational status of technology enterprises, and creating better conditions for their financing services. At the same time, improve the financial service system for investment and loan linkage. Lin Jianhua believes that developing investment loan linkage can help solve the problem of uncertain and high-risk development of technology-based enterprises that credit returns cannot cover, and improve the risk tolerance of commercial banks towards technological innovation. From a practical perspective, the efficiency of investment and loan linkage between commercial banks and their wealth management subsidiaries is relatively high. It is recommended to support national bank wealth management subsidiaries to expand their internal investment and loan business scale, support eligible local legal person banks to establish wealth management subsidiaries, expand internal investment and loan linkage business, and provide better long-term financing services for technology-based enterprises.

Digital Finance: The Central Committee of the Communist Party of China attaches great importance to the development of digital finance. The Central Financial Work Conference has listed digital finance as one of the five financial articles, requiring financial institutions to accelerate digital transformation, improve the convenience and competitiveness of financial services. At the Second Session of the 14th National Committee of the Chinese People's Political Consultative Conference, Bai Tao, a member of the National Committee of the Chinese People's Political Consultative Conference and Chairman of China Life Insurance Group, submitted a proposal to strongly support the development of digital finance, providing suggestions and suggestions to promote fundamental breakthroughs in digital finance. Bai Tao pointed out the difficulties and challenges in the development of digital finance at the meeting. One is that the legal system that adapts to the development of digital finance needs to be improved. There is a lack of clear regulations in promoting data sharing, circulation, and legal utilization, and the value of data elements has not been fully unleashed. Secondly, the construction of digital financial infrastructure still needs to be strengthened. At present, data from different fields such as population, health, healthcare, transportation, and environment have not been effectively integrated, and the efficiency of computing power resource utilization is not high. A large amount of algorithm development efforts have not been effectively utilized. Thirdly, the regulation of digital finance urgently needs to be upgraded. The more diverse forms of digital finance have led to a stronger concealment and contagiousness of financial risks, posing new challenges to the regulation of digital finance; Digital finance is an ecosystem that urgently requires the government, regulation, and all sectors of society to work together to answer questions and make concerted efforts.

In response to this, Commissioner Bai Tao proposed four targeted suggestions in the "Proposal on Strongly Supporting the Development of Digital Finance": first, adhere to the principle of legislative amendments first. Establish and improve laws and regulations on centralized and open sharing of public data, clarify implementation rules for compliant data circulation, balance security and liquidity, support financial institutions in using big data for product and service innovation, and create better conditions for fully leveraging the role of data elements and promoting the development of digital finance. The second is to accelerate the improvement of digital financial infrastructure. Give full play to the leading role of the government, accelerate the construction of public big data platforms connecting industries such as healthcare, agriculture, forestry, and meteorology, establish a secure and authoritative computing resource supply capacity and supply system, strengthen the coordination and utilization of artificial intelligence basic platforms such as big models, provide universal and basic intelligent services, and avoid resource waste and potential risks. The third is to strengthen the supervision of digital finance. Improve the regulatory system and supervision and evaluation mechanism for digital finance, accelerate the development of regulatory tools and platforms based on digital technology, strengthen monitoring and prevention of large model algorithms and application scenarios, and ensure that the development of digital finance adheres to the fundamental purpose of serving the real economy and conforms to the value orientation of putting people at the center. The fourth is to accelerate the construction of a digital finance talent team. We will closely monitor the development trends of cutting-edge digital technologies such as artificial intelligence and cloud computing, improve the talent training system for digital finance, establish interdisciplinary fields between digital technology and finance in universities and research institutes, and focus on cultivating composite talents in digital finance. Continuously improve the vocational skills training system for financial practitioners, and promote their timely mastery of digital knowledge and skills.

Pension Finance: On March 5th, Xie Wenhui, a National People's Congress representative and Party Secretary and Chairman of Chongqing Rural Commercial Bank, stated in an interview with China Rural Finance that during this year's two sessions, he submitted a proposal on focusing on improving the "four levels" and deepening the construction of digital rural areas. It is pointed out that "currently, 10 types of financial institutions, including rural commercial banks and consumer finance companies, mainly serve the inclusive finance group. They can consider reducing their credit reporting business costs in institutional arrangements, using technological means to further improve efficiency, and better provide services to the inclusive finance group." Specifically, rural credit institutions should promote the deep integration of inclusive finance and digital finance, deepen digital transformation, and use technology to empower and improve the online and intelligent level of inclusive business, forming new development momentum. Improve the aging friendly financial service system, actively promote the aging friendly transformation of hall services, self-service terminals, and payment services, launch the "social security service matters into the bank" business, research and launch mobile banking, help the elderly overcome the "digital divide", and more conveniently and quickly handle business. Continuously tracking the development of industries such as elderly care institutions, healthcare, and medical devices, focusing on the needs of elderly care, strengthening the creation of exclusive products, and improving the nine major scenarios of life services for the elderly, including food, housing, transportation, travel, entertainment, and medical care. Vigorously establish activities such as "Silver Age School", expert free consultations, and health examinations, popularize basic financial knowledge, provide health guidance and advice, and provide thoughtful and considerate convenient financial services for elderly customers.

HP Finance: Wu Jiezhuang, a member of the 14th National Committee of the Chinese People's Political Consultative Conference, a member of the Hong Kong Legislative Council, and Chairman of the Board of Directors of Gao Feng Group, has submitted relevant proposals on improving China's credit reporting service system and further unleashing the development potential of inclusive finance. Specifically, Wu Jiezhuang suggests further supporting non commercial banking financial institutions such as rural commercial banks, small loan companies, and consumer finance companies to enjoy the same credit inquiry volume and credit contribution multiplier policy as commercial banks, and promoting more financial institutions to contribute more to the construction of inclusive financial services; Improve the flexibility of fee standards and allow financial institutions to independently choose to apply bank tiered pricing policies under appropriate conditions, further reducing the cost of using credit data.

Wu Jiezhuang also believes that in order to truly achieve inclusive finance, the direction of credit reporting institutions should be to "reduce borrowing costs and encourage responsible borrowing.". To achieve this goal, on the one hand, it is necessary to accelerate the expansion of the service scope of credit reporting agencies, enrich the data sources of credit reporting agencies, and on the other hand, it also requires the joint efforts of the whole society, including credit reporting agencies. Firstly, regarding the former, Wu Jiezhuang proposed that China can learn from the MCRA (Multiple Credit Reference Agencies) case in Hong Kong, where the central bank becomes a database and allows other credit rating agencies such as Baihang and Park Road to operate, expanding their current service scope. It is worth noting that drawing on the number of credit reporting agencies in the United States, the United Kingdom, Malaysia, and Hong Kong, Wu Jiezhuang believes that "the largest capacity in China is having 4-5 authorized credit reporting agencies.". Regarding enriching and expanding the data sources of credit reporting agencies, Wu Jiezhuang proposed that "establishing a personal and ESG (i.e. environmental, social, and corporate governance) data bureau is a good direction.". Taking personal credit reporting as an example, he believes that combining and comprehensively utilizing personal credit ratings, including life information, volunteer service information, environmental protection information, ESG information, etc., and ultimately evaluating them through big data, is the most scientific and comprehensive way to obtain a personal credit rating.

Green Finance: Zhang Kui, member of the National Committee of the Chinese People's Political Consultative Conference and Secretary of the Party Committee and President of the Hangzhou Central Branch of the People's Bank of China, stated in a media interview that green finance still faces problems such as the lack of smooth mechanisms and channels for financial institutions to obtain carbon information in serving the dual carbon process. He suggested increasing the empowerment of digital technology and positive incentives for green finance.

Huo Yingli, member of the National Committee of the Chinese People's Political Consultative Conference and Secretary of the Party Committee of the China Foreign Exchange Trading Center (National Interbank Funding Center), will submit relevant proposals and suggestions to promote the high-quality development of green finance during this year's two sessions. Regarding fintech, she proposed suggestions to improve sustainable information disclosure mechanisms. Sustainable information disclosure is an important foundational system of green finance. At present, the international community has basically achieved the integration of sustainable information disclosure from multiple standards to a single standard, and from voluntary disclosure to mandatory disclosure. China has successively proposed information disclosure requirements for listed companies and bond issuing enterprises, but there are still problems such as unclear management responsibilities, limited scope of disclosure subjects, single disclosure content, and inconsistent disclosure format. She suggested strengthening the construction of sustainable information disclosure, unifying disclosure standards, and actively promoting domestic standards to align with international standards. At the same time, effective measures should be taken to promote the implementation of information disclosure standards and expand the subject and scope of mandatory disclosure. Give full play to the existing financial infrastructure, fully utilize technology empowerment, propose standardized and unified digital requirements for the content and format of information disclosure, and consolidate the digital foundation of information disclosure. Strengthen international cooperation in sustainable information disclosure, actively participate in the formulation and improvement of international rules, and enhance the inclusiveness and compatibility of international rules.