Wenzhou Shoes And Clothing Manufacturing Intention To Create A New Financing System

To study the Chinese economy, we must pay close attention to Wenzhou. In the face of China's economy, it has been a long way to go in the past 30 years. Development In the course of development, Wenzhou is a Pathfinder. To study the development of China's private economy and small and medium-sized enterprises, we should study Wenzhou and Wenzhou people. However, at present, the global economy has just left the world. financial crisis In the ICU, the European sovereign debt crisis, which has lasted more than a year, has pushed the world into an "urgent moment". The loan crisis in Wenzhou has once again become a hot topic in the global and national attention. Premier Wen Jiabao has visited Wenzhou for the two time this year, and there has been a lot of talk about "saving Wenzhou" for a while. Will the Wenzhou crisis spread? Will it become a "subordinated debt" that will crush China's economy? Is there any prescription? No matter the macro level. Economics Managers, entrepreneurs and investors in the capital market need calm reflection.

The basic point of reflection is that Wenzhou's shoes and clothing economic financing dilemma is the "bitter fruit" of China's inefficient financial system. Over the years, I have been paying close attention to the development of small and medium-sized enterprises in recent years, especially the financing problems of small and medium-sized enterprises. But what we have to say is that the fundamental problem of China's financial intermediation system at the macro level is that China's SMEs will encounter difficulties in the expansion of monetary policy or the tightening period. In other words, as long as the transformation of China's economic development mode has not yet been realized, financing difficulties will be an eternal problem.

This may be too pessimistic, but this is a logical concordance. Financing instruments, including credit and bonds, are essentially debt instruments. Those who hold these tools are assets, and those who issue them are the corresponding liabilities. An efficient financial intermediation system is to guide social savings to those who are highly efficient in capital utilization, while the total debt of the whole society reflects the scale and leverage ratio of financial intermediaries. Analyzing the balance sheet of China's sub sectors, one basic data is that the debt scale of state entities, including national debt, local government financing platform and large state-owned enterprises, exceeds 80% of the total debt of the whole society. Under this trend, it is difficult for SMEs to obtain financing.

Furthermore, because of the interest rate control of the central bank, these state-owned entities have acquired these cheap debts at the price of real negative interest rates, which are in essence a dilemma for local governments and large state-owned enterprises. Can't you see that these state-owned monopolies have been advancing vigorously? Do not you see the "12th Five-Year" investment competition that has been released by local governments these years? Do not you see the bubble of high investment and asset prices in China these years? The secret of all these lies in subsidies and comfort.

So is the investment in state-owned entities formed in the past few years efficient? To answer this question, we just need to take a look at the overall price earnings ratio of the banking sector in Shanghai and Shenzhen two cities. Although our banks have announced more than expected profits and bad debt provisioning rates far beyond the regulatory level, their average price earnings ratio is the lowest in the stock market, around 6 times. This shows that the market simply does not believe in the beautiful data that has been released. It is believed that the debts of these state-owned entities may be "toxic", especially for the future investment collapse, which has lowered the price earnings ratio of banks.

Then, will the collapse of investment come? Many people think that, including the expected "08 years of international financial crisis" of the United States, "Dr. doomsday" believes that no country in history has escaped the collapse of investment bubbles. However, I think China's economy is less likely to encounter such an instant crisis. Who has seen the financial crisis in the former Soviet Union? However, there will always be a way to pay for it. We have our own currency, which is inflation. Finally, we will realize the huge scale of state owned entities through the inflation household sector. What is the "bitter pill" of this troubled economy? Some private enterprises in Wenzhou are now trapped in financing difficulties and may be partial and specific. The overall economic "bitter fruit" is the slow growth over the years.

Instead of dragged away, it is time to return to Wenzhou's borrowing crisis. No matter how Wenzhou develops, it must not be separated from the great background of China and can not be separated from the background of the world economic pattern.

Under such a big pattern of the US financial crisis and the European debt crisis, the world economic trend of thought has changed. One is to reflect on financial overriding industries, especially in the US. They find that excessive financial innovation, excessive expansion of fictitious economy, hollow and hollowing industries, drown out some traditional advantages of the United States in the past. One is to say goodbye to liberalism and return to Sai's law. For example, before iPad, do we have any demand for iPad? Say's point of view is that supply must determine demand rather than liberalism. It relies on the ultimate debt, deficit or both, to drive the expansion of the economy. Recently, the government officials represented by Hilary in the United States are planning to rebuild and rebuild their industries.

Of course, the problem in Wenzhou is more complicated, both in terms of Finance and industry. On the one hand, there is no efficient local financial intermediation system. The Wenzhou model we are familiar with has produced our lighters and our shoes have provided a very rich, practical and practical product and economy to the whole world. However, according to my inspection, the once developed entity economy, small and medium-sized enterprises and private economy, is largely funded by traditional business associations and chambers of Commerce. This kind of financial intermediation system basically stays in the era of the Qing Dynasty and the money bank. In addition to being very fragile, the risk is very high, and it is easy to encounter the liquidity crisis of self actualization. With my thinking and observation, do not say that dozens of bosses have gone on the road. Even if there is no boss running on the road, as long as there is such a rumor, panic can lead to the collapse of this fragile financial intermediation system. Of course, I am not as pessimistic as most people think of the current crisis in Wenzhou. After all, this is a liquidity crisis caused by confidence and a non solvency crisis. On the contrary, I have an optimistic idea that Wenzhou needs no help from others, and Wenzhou can completely redeem itself, because Wenzhou's economic development over the past 30 years has been more abundant than most other parts of the country, and its wealth strength is even stronger.

At the same time, there is no doubt that there are serious problems in Wenzhou's industry. Most of Wenzhou's industry stays at the low end of the value chain, with low innovation and pricing power. Such an industrial structure is bound to withstand the impact of external demand such as the international financial crisis and the European debt crisis, and it is also difficult to cope with the gradual appreciation of the renminbi and the sharp rise in labor costs. So we have seen the other side of Wenzhou's economy in recent years. In the past 30 years, the wealth accumulated by the real economy has been instinctively driven by capital gains. In real estate, fried soybeans, fried garlic and everything can be fry, they have entered the wild eye of Wenzhou businessmen. It can be said that the source of the current crisis in Wenzhou is the crisis of confidence in industrial growth and competitiveness, and is intertwined with financial issues, spreading and spreading each other. It can be said that in this part of Wenzhou, we see a typical way to achieve financial and industrial interaction crisis.

Where is the way out for Wenzhou's salvation? We have seen that Premier Wen has already arrived. The State Council is going to give us a licence for the demonstration area of financial reform to Wenzhou, and various departments of the State Council are stepping up the matter. No matter how the design of the Wenzhou financial reform area is designed, the role of the local government should be played in the long and short term, providing flexible and abundant institutional supply.

First is to enhance the transparency of the local financial intermediation system, reshape and boost market confidence. Where is the confidence of the market? The most important thing is to shine the shadow financial intermediation system of the private lending that has been underground, eliminate the market's collapse of the underground credit system, and worry about the uncertainty of its prospect. In particular, we should break through the existing system, try it first, and make it onto the formal financial system through flexible and rich institutional arrangements. Of course, in this process, government supervision must be strengthened, especially to clean up and reorganize the real underground lending institutions that are really in trouble. At the same time, the government should convey a clear message to the society. The balance sheet of Wenzhou is very strong. Some formal financial institutions do not need to malicious debt. From an urgency point of view, this is the only opportunity window in Wenzhou. If it is missed, there is basically no possibility of redesign. Of course, if the Wenzhou financial comprehensive reform area is successful, it will not only create an efficient and innovative local financial system, but also solve the financing problems of small and medium-sized enterprises and private economy, and also create a huge gold financing industry. At the same time, I believe that this is a huge contribution to the financial development of the whole country.

In the long run, it is not enough to improve the financial system, but also to promote the transformation and growth of Wenzhou's economy. The local government must understand that growth and competitiveness are the biggest guarantee for the financial system. It is undeniable that the development of China's economy over the past 30 years has changed the demand of the people from the basic needs of shoes and hats and clothing to the needs of enjoying and developing type. The private economy of Wenzhou must also adapt to the advanced needs of the market demand structure, which poses severe challenges to the development ideas, development paths and development measures of the local government. Of course, I also have an optimistic view of this point. After solving the current underground loan crisis, even if the local government has little or no effect in promoting the transformation and development of the private economy, I also look forward to the strength of the market itself. Wenzhou's private entrepreneurs and small and medium-sized enterprises have accumulated wealth over the past 30 years. With the unique innovative spirit of Wenzhou, we will surely find the path of economic innovation and development.