Which Restrictions On Reform Should Be Loosed?

If it is not adjusted or abolished as soon as possible, it will hamper the reform.

For the capital market, these "red lines" can be regarded as the key window to observe the reform and future market trend. If the red line is loosed or even abolished, it means that the enhancement of endogenous driving force and the improvement of the quality of economic growth will be most beneficial to the capital market and the "new economy" which is in line with the direction of reform and pformation.

If the red line is not relaxed, it means that economic growth is still stuck to the traditional government led mode, and the progress of reform and pformation will be lagging behind, which will become a shackle for the capital market.

The development of an economy is like a person's growth.

Puberty (economic take-off) has been jumping up and down (and potential growth rate). Many times, nutrition can not keep up with (insufficient effective demand). Especially when the temperature drops suddenly (financial crisis), it is necessary to take some supplements (fiscal and monetary expansion), and sometimes even need to make hormones (4 trillion).

But once you enter adulthood, it will not be possible to grow longer. If you still want to grow up, forcing hormones can not only grow longer, but also cause puffiness (stagflation) or high risk physical fitness (overcapacity and debt risk).

For the Chinese economy, it is now in a critical period of pition from adolescence to adulthood.

With the fading of the internal demographic dividend and the external globalization dividend, the economic growth rate can not keep growing at a high speed, and shifting to the middle and high speed is inevitable.

If we emphasize too much on the "red line" of growth rate and continue to engage in stimulating policies, we will not only be able to return to the high growth in the past, but will hinder structural adjustment and make the quality of economic growth worse and worse.

The reason is that the stimulus policy is still a government led non market behavior, which distorts the allocation of resources.

On the one hand, stimulus will delay the natural clearing and leveraging of the market.

The recovery of corporate profitability must be based on market clearing, capacity production and debt digestion. Otherwise, the free cash flow of enterprises will be swallowed up by debt black holes step by step, and no sustainable profits can be formed.

On the other hand, the stimulus policy often takes the public and the state sector as the carrier, leading to the tilt of financial resources to the private sector, resulting in "crowding out" effect on the private sector, resulting in "country" entering the "people" retreat, which is not conducive to structural pformation.

"Dilapidated" can "create new", and the policy should follow the trend, change from pursuing growth speed to improving the quality of growth, break down 7.5% of the growth line as soon as possible, and make more flexible growth targets.

The loan to deposit ratio is a special product under the "old normal". Under the "new normal", it is no longer suitable for banks to lend money reasonably and support the real economy.

First, there is a reverse trend in the double surplus of the balance of payments. Deposit growth has lost its important source.

Over the past ten years, under the current account and capital account double surplus, to stabilize the RMB exchange rate, the central bank has been forced to invest foreign exchange as the main channel of the underlying currency.

Foreign exchange has become a key factor for improving the loan to deposit ratio index of financial institutions. The ratio of deposit to loan ratio has a constraint on excessive credit of financial institutions.

With the opening of the capital account, the turning point of China's demographic dividend, the narrowing of the savings investment gap and the termination of the global liquidity feast, the double surplus pattern is reversing the trend, and the contribution of foreign exchange to the growth of deposits is also weakening.

Under this background, the deposit loan ratio supervision will restrict the bank's reasonable credit delivery.

Second, the interest rate liberalization is accelerated, and the general deposits of financial institutions are converted into interbank deposits. The loan to deposit ratio checks and controls the normal growth of credit in the table.

In recent years, the rapid development of financial innovation such as bank financing and Monetary Fund has profoundly changed the behavior of residents' financial asset allocation.

But the deposit and loan ratio checking denominator corresponds to the general deposit, which does not include the interbank deposits of the non deposit financial institutions corresponding to the monetary fund, which leads to the serious underestimation of the denominator, and meaningless increase of the deposit loan ratio to the credit limit.

Third, the deposit loan ratio assessment has created non-standard and other shadow banking business, amplifying financial risks and raising the financing cost of the whole society.

State owned enterprises and local governments are not sensitive to interest rates. Because of the demand for steady growth, they have generated huge demand for financing. They have to bypass the supervision of loan to loan ratio through trust, brokerage and information management. The financing chain has been artificially lengthened, which is not conducive to effective control of capital flows by regulators, and has aggravated potential financial risks.

In addition, the lengthening of the financing chain has led to a marked rise in the financing cost of the whole society. The problem of financing difficulties of private enterprises has become more and more serious. The credit market has obviously mismatched, and the economic structure has further deteriorated.

3. Cultivated land red line: 1 billion 800 million mu.

The most important "one issue" is the "1 billion 800 million mu arable land red line".

The 1 billion 800 million mu red line has its rationality under the old normal condition.

From the end of the last century to the beginning of this century, China's cultivated land area, total grain output and per capita grain output continued to decline. The arable land decreased from 1 billion 945 million mu in 1998 to 1 billion 851 million mu in 2003. The total output of grain decreased from 5.12 million tons in 1998 to 4.31 billion tons in 2003, and the annual output of per capita grain decreased from 410 kg in 1998 to 333 kg in 2003.

Food is the food of the people. For the sake of food safety, the central government began to crack down on illegal use of land.

In 2006 and 11th Five-Year, the plan for the first time clearly stated that "1 billion 800 million mu of cultivated land is a legally binding index in the next five years and is an insurmountable red line".

In August 2008, the outline of the national master plan for land use (2006-2020 years) reaffirmed that the 1 billion 800 million mu arable land "red line" should be held firmly, and it was proposed that by 2010 and 2020, the cultivated land in the whole country should be kept at 1 billion 818 million mu and 1 billion 805 million mu respectively.

Under the new normal, the limitation of the 1 billion 800 million mu red line is becoming increasingly prominent.

First of all, the key to meeting the demand of grain is not the quantity of cultivated land, but the quantity of grain.

Between 2001 and 2012, although the arable land area dropped by 4.75% and China's population increased by 6.09%, the total grain output increased by 18.39%, and the total output of grain increased by 30.25%.

It is obviously unreasonable to calculate cultivated land red line according to the original technical conditions.

Secondly, China is now in the stage of accelerating urbanization. Because of the high demand for the red line of the 1 billion 800 million mu arable land, many land that can be rationally developed can not form effective supply, which indirectly promotes land prices, resulting in a series of chaos, such as land finance, forced demolition and housing prices.

Mixed ownership reform is the core of the new round of state-owned enterprise reform, and the success or failure of mixed ownership depends on whether public capital or non public capital can be truly equal.

Only by effectively protecting the "inviolable" status of the two parties, erasing the administrative color of public capital and exerting the market forces of non-public capital, can we really enhance the operating efficiency of state-owned enterprises.

This is not fully implemented in the old normal state of "management of human resources".

In a considerable number of cases, public capital not only defends the 50% red line in the proportion of the holding, but also plays more than "50%" in the actual operation, and the "mixed" non public capital does not enjoy the right to speak in proportion to the proportion of capital contribution.

Under the new normal, the management system of state assets should be pformed from "management of human assets" to "management of capital". The core is to reverse the unfair position of public capital and non-public capital.

For most of the competitive areas that can be marketed, state capital is absolutely not necessary to maintain a dominant position and make social capital more powerful.

For the monopolistic field, which is related to the lifeline of the national economy and public ownership, state capital should not be held to 50% of the absolute holding position. It can learn from the international experience of gold shares and retain the right of veto on public capital and give full play to market forces.

5, the red line of exchange rate fluctuation: + 2%

China's current exchange rate system is a "managed" floating exchange rate system. There are two ways to manage the government. One is "quantity", that is, direct intervention in foreign exchange, and the other is "price", that is, setting the middle price and the fluctuation range around the middle price.

The management of exchange rate fluctuation is actually contrary to the automatic regulation mechanism of floating exchange rate system. However, under the old normal situation that China is faced with the pressure of capital inflow and unilateral appreciation of RMB, limiting the fluctuation range of exchange rate will help to alleviate the pressure of RMB appreciation and avoid the passive easing of domestic liquidity, which is reasonable.

Under the new normal, with the gradual narrowing of the double surplus, the pressure of unilateral appreciation of RMB has been significantly relieved, and the exchange rate can be completely realized under the market decision.

In addition, under the background of the current reform and pformation, monetary policy should strengthen independence as far as possible, serve domestic policy objectives, rather than be trapped in the red line of exchange rate fluctuations, and blindly hedge foreign capital fluctuations, and lose the independence of monetary policy.

Some people worry that loosening the range of exchange rate volatility may trigger capital flight. But in fact, China has not fully realized the free flow of capital, and has such firewalls as high foreign reserves, high growth and low external debt, which should not bind the reform of the exchange rate market.