As to the Source of Flowing Water
--responding to Prime Minister Li aspiring that Let Financial become a pool Living Water
As we know, financial industry’s boom and steady relies on the economic prosperity and stability development. The real economy is the material basis of social wealth and overall national strength, and plays a decisive role for the development of financial industry. The financial crisises have shown that once the finance departing the real economy, it will evolve into a flower drum gambling game (a Chinese traditional game), and ultimately lead to bad consequences and harm the real economy. Therefore, the Third Plenary Session of the 18th Central Committee of the C.P.C, China’s Central Economic Work Conference and the National Finance Conference and other meetings stressed the need to optimize the financial allocation of resources, with a good increment and revitalize the stock, to support economic restructuring and upgrade, and that the bank founds should flow to the real economy effectively. The Government Work Report delivered by Premier Li Keqiang in the National People's Congress and the Chinese Political Consultative Conference (NPC&CPPCC) takes it up to the height of a strategy as a priority to require financial institutions to implement. The report stated: Let the fiancé become a poor of flowing water, to irrigate the real economic trees of small & micro enterprises and agriculture work.
Prime Minister Li’s call is the necessary requirement to promote finance adapting to
Small and micro enterprises are vital force of the national economy, providing new jobs and entrepreneurial growth of the main platform, are a major force in technological innovation. According to statistics, there are 60 million small and micro enterprises, accounting for 97.3% of total business, created 80% of employment, 60% of GDP, 50% of revenue, but the financial support received loans accounted for only about 20% of total loans, which does not match its role played in China’s national economy. “Financial difficulties” problem has not been solved. With the interest rate marketization, acceleration of the financing disintermediation, financial industry’s balance of risks and benefits and other factors, supply and demand of small and micro enterprises presents a “double-up” trend, which is a good news. Chinese Deputy Prime Minister Ma Kai has stressed the need to ensure the realization of small and micro enterprises loan growth and increment, “not less than two” target, and effectively improve the proportion of their credit. The CBRC has repeatedly introduced supporting measures and policies for small and micro enterprises, such as the six operating mechanism and differentiation strategies, etc.
The issue of agriculture, rural development and farmers has always been a national priority, its annual steady squat position of the central document signifies its importance. However, deepening rural reform, accelerating agriculture modernization construction, increasing policies enforcement of strengthening agriculture and benefiting farmers, which are all inseparable from the financial support. What’s more, agriculture financial service is a common theme, with industrialization, urbanization, agricultural modernization proceeding, especially under the situation that the government continuously put effort to support and benefit farmers, agriculture and the rural economy are undergoing profound changes. New business subjects as the family farm, farmer cooperatives, and industry leading enterprises continue to emerge. Moreover, the gradual marketization of land contracted management right, rural collective construction land use rights, farmers housing property rights; the vigorously promote of urbanization and new socialist countryside construction; the county distribution market’s scale-up and centralization, these changes provide rural services with a new direction and a higher demand for the financial industry. Financial industry should seize the opportunity to catch up, in implementing the premise of “two of not less”, actively support new agricultural business entities’ innovation, innovative urbanization financial services policies and products, innovative services in rural commodity circulation system construction and launch more delivery and support to county economy, effectively conveying a steady stream of fresh blood to the development of agriculture and rural areas.
An old saying goes that “speech necessarily line, line necessarily fruit”. Under the situation of new online financial, new financial formats constantly coming out, traditional finance is facing severe challenges. Four major banks as the country’s financial leader, if do not firmly grasp the real economy, they would not go forward just like a boat without water. Therefore, financial sector couldn’t always “sit pontificating”, but to work out a policy, a system and a program to speed up mechanisms for serving small & micro enterprises and rural areas innovation, product innovation, channel innovation and guarantees innovation, increase the credit intensity, improve the ability of basic financial services, and perform in place, as “empty talks would lead the country astray, and hard work can rejuvenate the nation”.
“How could it be so clear and cool? For fresh water comes from the source.” Financial institutions and the real economy are equal length, supplement each other. It is said Minsheng Bank to support small and micro enterprises, the Agricultural Bank in serving rural areas have been at the forefront of the financial industry, and have achieved good economic and social benefits for their own. What’s more, major financial institutions have also introduced polices, we can imagine in the new government’s strong emphasis and support, small and micro enterprises, “three rural” and the other real economies tree will thrive and become an evergreen tree to promote the healthy development of China’s economy.