Source: chinadaily

Themed on "New Pattern, New Development, New Finance", the 2021 Tsinghua PBCSF Global Finance Forum was held in Beijing on May 22 and 23. Distinguished guests from the government, industry and academia were invited to deliberate on the current and future of China and world's economy and finance under the COVID-19 pandemic.

Let's take a look at some of the quotable quotes from the forum.

PBOC Vice-Governor Li Bo

The central bank, the People's Bank of China, will improve the so-called macro-prudential policy framework, which requires building a full-range financial risk monitoring and warning system, especially to supervise activities of adding leverage, debt, and financial cycles.

Li said to establish targeted policy tools and include influential financial activities, financial institutions, financial markets and related infrastructures must be placed into the macro-prudential management system to prevent systemic risks.

The central bank will further optimize the financial regulatory framework, consider further clarifying and separating the prudential supervision function and behavior supervision function of regulatory authorities, Li added.

PBOC former governor Zhou Xiaochuan

China's experimental digital yuan is not designed to replace the US dollar's global dominance. The digital yuan, also known as e-CNY or Digital Currency Electronic Payment, is primarily built on modernizing China's payment system and playing catch-up in the era of the digital economy and aims to raise efficiency, reduce costs and serve the retail payment segment in particular.

Efforts to modernize and digitize the yuan-denominated payment system would help in increasing the yuan's status. However, the yuan's internationalization is contingent upon the country's institutional and policy choices, and its reform and opening-up progress, he said, and technical factors are only helpful to some degree.

Zhu Min, former deputy managing director of the International Monetary Fund

The outbreak of the COVID-19 pandemic shows that the global economic and financial governance system built 70 years ago is extremely outdated, Zhu said. It has lagged far behind the reality and needs of the global economy and can no longer provide sufficient public products for global economic development and changes.

“Therefore, when we are considering reforming and building a new global governance mechanism to cover and address new major challenges, we need to consider top-level design, which is to build the G20 to become the top leadership of the global economic governance. We need to specify its functions, status, and implementation capabilities, and build the G20 into a true political force that represents the global economy and finance,” Zhu said.

Xiao Gang, former chairman of the China Securities Regulatory Commission

China's new infrastructure, mostly involving the likes of 5G, artificial intelligence, big data and cloud computing, has seen rapid development since the 13th Five-Year Plan period. New-era information technology infrastructure integrated with social and economic fields is playing an important role in building a new country and achieving high-quality development.

However, the development of new infrastructure also faces some problems, such as lack of finance, low investment from private enterprises and unsound market-based investment and financing modes.

The country should speed up construction of new infrastructure investment modes, strengthen the guiding role of local governments' funds, and explore the profits and risks sharing mechanism for new infrastructure, Xiao said.

Zhang Xiaoyan, deputy dean of Tsinghua National Institute of Financial Research

Cultivating an ecosystem centered on digitalization is needed for the country to pursue a stable, sustainable and balanced growth pattern. In the ecosystem, governments are expected to inject fresh impetus into infrastructures and other facilities, as market regulators will step up effective supervision for the digital sector, Zhang said.

As for companies, they can seek upgrades or transformation through the ecosystem; and residents can also share in the benefits of the digital economy with much better employment opportunities and higher incomes, Zhang added.

Ye Wei, CEO of 58 Digital Tech

Fintech enterprises need to be very clear about where they fit into the economy. It would be wrong if Fintech companies viewing themselves as competitors with traditional financial companies.

"Digitally-driven economy generates a broad range of rosy opportunities; however, massive wealth has been concentrated in a handful of countries, companies, or a small number of people, bringing in huge challenges for policymakers to set up proper supervision mechanism to reduce wealth gap which undermines the development of digital economy,” Ye said.

Zhang Xiaohui, former assistant to the Chinese central bank governor and dean of the PBC School of Finance

China should pay attention to the changes in monetary policy in developing countries, which may result in short-term impacts on the domestic financial system.

"We should closely watch the inflation of global asset prices, and the related over-leverage, as well as financial instability," Zhang said, adding that to prepare for different inflation scenarios, especially to properly manage expectations. Overheated investment in some areas caused by rising structural inflation could be another risk, she said.

Richard Apostolik, president and CEO of the Global Association of Risk Professionals

China has made risk management a priority for the financial services industry and the country. "It's been very clear about this priority."

"Recognizing the importance of risk management at the most senior levels of the government embeds it into the country's corporate psyche, from the most junior to the most senior levels in an organization, and will help reduce or avoiding negative outcomes while building a solid foundation for rapid and continued growth," Apostolik said.