As the host, the global governance scheme provided by China in G20 Hangzhou Summit has attracted much attention, while G20 also becomes an important window for all parties to observe Chinese economy and society.
From the speech of Xi Jinping, President of China, to the presentations of multiple senior finance officials, release of a series of policy signals will make the anticipation of Chinese economy more stable.
Promoting “One Belt and One Road”: Focusing on Benefit Sharing
At the Opening Ceremony of the B20 Summit in 2016, Mr. Xi said that, he made the recommendation of “One Belt and One Road”, aiming at realizing common prosperity with the development opportunities of all countries along the line.
During the Summit, he also took “One Belt and One Road” as the important topic in the talks with the heads of multiple states, such as President of Russia Putin, and Turkish President Recep Tayyip Erdogan.
The dividends of “One Belt and One Road” are obvious particularly in infrastructure construction. Jin Liqun, President of Asian Infrastructure Investment Bank (AIIB) disclosed that, the Board of Directors of AIIB approved the first batch of four infrastructure loan projects from Bangladesh, Indonesia, Pakistan, Tajikistan in June, and the total loan was USD 0.5 billion. The Multilateral Development Bank (MDB) may often unite financing to boost infrastructural projects in the future.
Drastically Cutting Excessive Industrial Capacity: We will do what we say.
As a hard bone of the supply side reform, the task of cutting the excessive industrial capacity in China is arduous. The National Development and Reform Commission disclosed that, as of the end of July, 38% of the task of cutting the excessive industrial capacity of coal has been completed, and 47% of steel completed.
Mr. Xi said, China had made full efforts and taken practical measures to do what we say about cutting the excessive industrial capacity. It means that, next, China will take multiple measures to cut the excessive industrial capacity.
Zhu Guangyao, Deputy Minister of the Ministry of Finance of the People's Republic of China disclosed that, China was gradually boosting and establishing bankruptcy trial divisions nationwide, which is an important way of resolving excessive capacity by law.
Relaxation of Foreign Investment: Building an open new platform
In this summit, Mr. Xi proposed the policy suggestions on “building an open world economy, and expanding the development space” for global governance, while China also took the lead in relaxing access to foreign investment.
China will carry out the management mode on foreign investment with pre-establishment national treatment plus negative list nationwide after passing through the revised draft of “Three Laws on Foreign Investment” a few days ago.
Wang Shouwen, Deputy Minister of the Ministry of Commerce of the People's Republic of China said that, it was a significant reform on the foreign investment management system in China, and it was a concrete manifestation of promoting foreign investment environment and accelerating investment facilitation.
Expanding SDR Products: Promoting RMB Internationalization
A year ago, People’s Bank of China implemented exchange rate reform on RMB. Mr. Xi said that, China would continue to promote RMB to go out while orderly carrying out exchange rate market-oriented reform on RMB and gradually opening the domestic capital market, so as to improve the internationalization level of the financial industry.
Before this summit, the World Bank successfully issued the first SDR (Special Drawing Right) bond settled in RMB, and the issuing scale was 0.5 billion SDR; the term was three years, and the settlement currency was RMB.
Yi Gang, Vice President of People's Bank of China, said that, China would create better conditions for SDR bonds and other financial products priced in SDR later.
Keeping Sound Money: Balancing Multiple Objectives
In New Normal, differentiation will become the prominent feature of Chinese economy. Also, different requirements have been made for the monetary policy by such new situations as capital flowing change, economic growth adjustment, and increased leverage.
For this, Yi Gang specified that, China was still carrying out the sound monetary policy at present.
Meanwhile, Yi Gang pointed out that, in the complex situation, three objects would be considered for the monetary policy: 1. to keep the liquidity reasonable and abundant; 2. to give play to the credit policy; 3. to create a moderately favorable environment.
Finance Contributes to Environmental Protection: Liberalization of Green Investment and Financing
Mr. Xi ever said again and again, green hills and clear waters are precious. China will contribute to environmental protection by means of financial instruments in the future while deploying fights for pollution control on atmosphere, water and soil.
G20 discussed the topic about green finance for the first time this year, and set up a green finance research group. This was considered to support accelerated development of green low-carbon economy in the world. Multiple ministries and commissions of China also jointly presented guiding opinions to specify Chinese green financial system framework.
Bie Tao, Deputy Director of the Department of Policies and Laws, Ministry of Environmental Protection of the People's Republic of China, said that, China has a heavy task of environmental governance now, and the environmental protection investment demand is huge, so it is just the time to set up the green financial system.