Xu Xiaonian on the impact of the epidemic: the situation of small and medium-sized enterprises cannot be ignored

category:Finance
 Xu Xiaonian on the impact of the epidemic: the situation of small and medium-sized enterprises cannot be ignored


4. Monetary policy should also be loose, but more importantly, it should solve the problem of poor transmission of monetary policy. We need to find ways to open channels to let the water released by the central bank flow into the fields of small and medium-sized enterprises.

The economic effect of the black swan event of the new coronavirus pneumonia is emerging. Recently, the head of Xibei youmian, a catering chain enterprise, said publicly that, affected by the epidemic, Xibei youmian will lose revenue of 700 million to 800 million yuan in one month before and after the Spring Festival. At present, the cash on the account plus the loan can only pay another three months salary at most.

The plight of Xibei naked face can be said to be a microcosm of the current situation of many small and medium-sized micro enterprises affected by the epidemic. In the current situation, how to look at the impact of the epidemic on the macro-economic and micro level enterprises? How to deal with macroeconomic policies? How to help the small and medium-sized micro enterprises affected by the epidemic? The Beijing News interviewed Xu Xiaonian, a famous economist and professor of CEIBS on these issues.

Xu Xiaonian said that he did not agree with the statement that the epidemic will bring a devastating blow to Chinas economy. The epidemic will affect Chinas economy for two or three quarters at most. As a short-term external impact, the epidemic will not change the long-term development trend of Chinas economy as a whole. Of course, the epidemic will make the promotion of medium and long-term structural reform more urgent than before, and the requirements for enterprise transformation more urgent.

Im still confident in the future of Chinas economy. Its not significant to discuss the impact of the epidemic on GDP. I dont care much about these figures. What should be really concerned is whether many small and medium-sized private enterprises can survive. Xu Xiaonian said.

How to help enterprises in trouble affected by the epidemic? Xu Xiaonian believes that there is still room for fiscal policy adjustment by reducing fiscal expenditure rather than increasing the deficit rate. It is suggested to refer to a series of tax reduction and fee reduction policies adopted by the government during SARS in 2003, so as to help enterprises overcome difficulties.

In terms of monetary policy, Xu Xiaonian believes that it is more important than policy easing to solve the problem of poor transmission of monetary policy. How to solve it? At this time, he suggested that we should appropriately relax market access control, improve regulatory efficiency, and restore or rebuild the capillaries of the financial system.

New crown pneumonia affects Chinas economy for two or three quarters at most

The Beijing News:

How much will the epidemic affect Chinas economy?

Xu Xiaonian:

The economic impact of the epidemic can be divided into short-term and long-term, direct and indirect.

In the short term, the impact of the epidemic on the catering, hotel, tourism, shipping, business and other service industries is very large. The performance of the capital market has reflected the recent decline of aviation, catering and hotel stocks. We should not underestimate the direct and short-term impact of the epidemic, which may exceed the impact of SARS in 2003, because the proportion of the tertiary industry in GDP is increasing year by year, reaching nearly 54% in 2019, far higher than the proportion of about 40% in 2003.

The indirect impact of the epidemic on the economy is no less than the direct impact. In order to prevent and control the spread of the epidemic, strict isolation must be carried out. Although the flow of personnel and materials has not been interrupted, it has been greatly slowed down, business activities have been postponed, and production cannot be carried out normally. All of these will lead to the slow down of the turnover of enterprises, especially the tight capital chain of small and medium-sized private enterprises. As a relatively large chain catering enterprise like Xibei naked face, the cash on the account is only enough to pay the employees three months wages. Some small-scale private enterprises may be more difficult. It is possible that a large area of small and medium-sized enterprises will close down, while small and medium-sized enterprises are related to 70.80% of the urban employment, which cannot be ignored.

During the epidemic, people are concerned about whether the R0 (infection rate / cure rate) of the virus is greater than or less than 1. If it is greater than 1, it will continue to spread. The financial multiplier in the economy must be greater than one, and much larger. Enterprise a is unable to pay the payment of supplier B due to its poor turnover. Originally, enterprise B was financially healthy. Due to as default, the fund was tight and unable to pay back Cs money. The snowball grew larger and larger, forming a chain of triangle debts.

In spite of such risks, in the medium and long term, it will not bring a devastating blow to Chinas economy as some self media have said. At present, the civil authorities work together to prevent and control the epidemic. Referring to the previous cases of SARS, the new crown pneumonia will affect the Chinese economy for two or three quarters at most, and will not change the long-term trend. The long-term development of the economy is mainly determined by the internal fundamentals.

We dont have to be too nervous about the downward trend of economic growth

The Beijing News:

What is the long-term development trend of Chinas economy?

Xu Xiaonian:

In the medium and long term, Chinas economy will bid farewell to high-speed growth and will operate at the middle and low levels for a long time.

To judge the economic situation, we need to find out one thing. Why has Chinas economy fallen in recent years? Because the dividends of industrialization are gone. After the reform and opening up, China has entered the stage of industrialization. The transformation from an agricultural country to an industrial country requires capital accumulation. Capital accumulation depends on investment. Driven by strong investment, Chinas economy has achieved double-digit high-speed growth. With the financial crisis in 2008 as the boundary, Chinas economic growth quickly dropped to 6% - 7%. On the surface, it is because of the external impact of the financial crisis. The actual situation is that it should have been the next step, industrialization has been completed, and the period of high growth of capital accumulation and investment is over.

China is no longer a big agricultural country. Before the reform and opening up, 80% of the population lived in the countryside. By the end of 2019, the urbanization rate of the permanent population in China will reach 60.6%. In the 1980s, we still had a shortage economy. We couldnt buy household appliances such as color TV sets and washing machines. Enterprises built factories and didnt worry about selling their products. Now they cant sell them. The market is saturated and the capacity is in full surplus. China has become the first power producer, the first steel producer, the first automobile producer and the first mobile phone producer from an agricultural country. Behind these firsts is overcapacity - we have no shortage of production capacity, no shortage of factory buildings, machinery and equipment, and China has formed a relatively complete and mature industrial economic system.

Isnt it normal for economic growth to decline without investment in the period of industrialization? Moreover, even if the economic growth rate is only 5 or 6, what does it matter? It is still the country with the highest growth rate in the world, at least one of the highest. Therefore, its not necessary to be too nervous about the downward trend of economic growth. Its meaningless to discuss 6 or 5, but how about reducing it to 3%? Anyway, I dont care. I should care about the quality of growth and the health of the enterprise.

The Beijing News:

You also mentioned that Chinas economic growth continues to decline, but the impact of the epidemic will increase this downward pressure. In this economic situation, how to deal with it?

Xu Xiaonian:

The short-term pressure of economic downturn is indeed relatively large. In addition to policy emergency, the task of medium and long-term structural reform is more urgent than before, and the transformation of enterprises is more urgent.

In the medium and long term, I still have confidence in Chinas economy. First, the worse the economic situation, the greater the hope for reform and the greater the strength of reform. Many reforms are forced out. Second, from the micro level, the vitality of private enterprises in China is very strong. In the popular words of the Internet, if you give some sunshine, it will be brilliant. The future and hope of Chinas economy lies in the private enterprises, not only in the state-owned enterprises, but also in the private enterprises. Under the pressure of the economic situation, many private enterprises are really looking for ways to transform and innovate. More and more enterprises want to learn from Huawei, and more and more enterprises talk about R & D, digital, Internet and innovation. These phenomena are encouraging. Its like self destruction of the Great Wall if you dont treat private enterprises well. The general secretary received entrepreneurs in 2018. Last year, the government issued 28 articles to support private enterprises, which shows that the central government attaches great importance to the private economy.

In reality, the living environment of private enterprises is difficult in recent years, which may worsen further under the impact of the epidemic. In the short term, it is necessary for the government to take targeted measures to help private enterprises alleviate the difficulties. The fundamental problem to be solved in the long term is the protection of property rights and fair competition. Its not enough to send a few administrative documents, a governor or a mayors speech. When the mayor is transferred, the past commitments will not count. Its still up to the property rights and fair competition guaranteed by law. Now private enterprises and state-owned enterprises still have different treatment. It is difficult for private enterprises to raise funds. It is easy for state-owned enterprises to obtain loans from banks. Some state-owned enterprises act as two dealers of funds and lie down to earn money from preferential policies. Is this fair?

In addition to the protection of property rights and fair competition, what the government can do is to deregulate, rely on the imagination and innovation ability of the people, realize the upgrading of the industry as soon as possible, and realize the transformation of the national economic growth mode as soon as possible.

Save SMEs by cutting other government spending rather than raising the deficit rate

The Beijing News:

What is the potential impact of the epidemic on GDP this year?

Xu Xiaonian:

The Beijing News:

How to save the small and medium-sized private enterprises affected by the epidemic? Is there room for fiscal policy?

Xu Xiaonian:

On the surface, apart from the central government, the fiscal surplus is not large. Some local governments are already quite difficult, even worried about paying wages. Some people say that this is because last years tax cuts caused fiscal tension. In fact, the real reason is that tax cuts do not reduce government spending accordingly.

The Beijing News:

In order to prevent the impact of the epidemic and expand financial expenditure, many people suggest that the financial deficit rate can be increased to 3%. What do you think?

Xu Xiaonian:

The Beijing News:

Many people call for tax cuts for small and medium-sized enterprises. What do you think?

I agree with the tax reduction measures to reduce or postpone the collection of taxes for small and medium-sized enterprises seriously affected by the epidemic. During SARS in 2003, the government adopted a series of policies to reduce taxes and fees to help enterprises overcome the difficulties. For example, from May to September of that year, the civil aviation passenger transport and tourism industry were exempt from business tax, urban maintenance and construction tax, and education surcharges; local governments reduced, exempted or postponed business tax, urban maintenance and construction tax, education surcharges, and taxi drivers were exempt from personal income tax or reduced their quotas. In that year, some government funds were reduced for industries greatly affected by the epidemic, including catering, hotels, tourism, entertainment, civil aviation, highway passenger transport, waterway passenger transport, taxi, etc. Beijing is also exempt from taxes for individual businesses that deal in vegetables.

More important than easing is to solve the problem of poor transmission of monetary policy

The Beijing News:

Under the impact of the epidemic, a consensus is that monetary policy remains loose. What do you think of the role and role of monetary policy in the current situation?

Xu Xiaonian:

Monetary policy should also be loose, but more importantly, to solve the problem of poor transmission of monetary policy. We need to find ways to open channels to let the water released by the central bank flow into the fields of small and medium-sized enterprises.

The central bank has decided to put 1.2 trillion yuan of liquidity into the market on February 3, which will undoubtedly ease the financial tension caused by the slowdown of economic activities and support market confidence.

But whether big water can flow into the fields of small and medium-sized enterprises is another problem. Why are you worried? Like the human body, the central bank is the heart, the large state-owned banks and insurance companies are the aorta, and the small and medium-sized financial institutions are the capillaries. The characteristics of our countrys financial system are strong and weak branches. The central bank releases water and the main artery delivers liquidity to large enterprises. There is no problem, but what about small and medium-sized enterprises?

Now we find that capillaries are either blocked or cleaned up or forced out. In addition to a small number of private financial institutions, the behavior, business model, customers and large banks are in serious convergence. They can only make standardized products of asset mortgage or very simple consumer loans. Small and medium-sized micro enterprises do not have many assets to mortgage, so it is difficult to finance. Internet finance has opened a new channel, which was completely cut off in last years regulatory storm.

Its unfair to say that the government doesnt care about the financing of small and medium-sized enterprises. The problem is that there is a deviation in the methods concerned and the aorta is allowed to do the capillary work. Large state-owned banks now regard small and micro loans as political tasks, and lend to small and medium-sized enterprises at very low interest rates, such as 5% or even lower. The most basic law of finance is to match the income with the risk. The risk of small and medium-sized enterprises is high, and they need double-digit interest rate to cover the risk. Otherwise, there is no way to write off bad debts, and they cannot continue to operate. Such a low interest rate may cause bad debts in the future.

Whats more, the low interest rate of state-owned banks has pulled away the high-quality customers of medium-sized financial institutions, such as city commercial banks, and squeezed the net interest margin of city commercial banks. In order to make up for the loss of business, city commercial banks only need to take the road of market sinking to lend to those high-risk enterprises, which in turn squeeze into smaller financial institutions such as small loan companies. When the small and micro loan assets of big banks go wrong - because they violate the market rules, they will certainly go wrong - and then go to the capillaries, small and medium-sized financial institutions may collapse and go, the aorta will burst, and the water will not reach the small and medium-sized enterprises.

Small private financial institutions can play the role of capillaries, because they are based on the community, and the salesmen are recruited from the community where the enterprise is located. They are very familiar with the local situation, and the information cost is very low, so that the business of small and micro loans can be done.

Financial system should enhance liquidity appropriately

The Beijing News:

In the industries seriously affected by the epidemic, the capital flow problem of some enterprises is now prominent. How to solve the problem of poor transmission of monetary policy?

Xu Xiaonian:

To restore or rebuild the capillaries of financing for small and micro enterprises, we need to deregulate and improve the efficiency of supervision. Regulation and control are two different things. Regulation is only about rules. It depends on whether an enterprise violates the rules, not on the market, institutions or operations. As long as there is no violation of the rules, enterprises can do it. We cant take orderly competition as an excuse. We should take care of this as well as that. We should take care of enterprises and industries. For example, Internet finance was originally an innovation, which could serve as the capillary of the financial system. Now the whole market has been shut down, and children have been thrown away together by splashing bath water.

For the current problems, it is suggested to provide liquidity to small and medium-sized financial institutions. For institutions that cannot enter the inter-bank market, such as village banks, small loan companies, factoring companies and leasing companies, broaden their financing channels and increase the upper limit of leverage ratio. The government may consider subsidizing the insurance premium of small and micro loans, but it is better not to discount the interest rate to avoid disturbing market signals.

Financial institutions that specialize in small and micro loans are allowed to operate across regions and provinces, such as Bank of Tailong and Bank of Taizhou in Zhejiang Province. They have rooted in the community for many years, explored a set of methods for small and micro loans, and trained experienced and conscientious teams. The banks main shareholders are individuals, who are more concerned about the safety of assets and the banks reputation than regulators. These banks also have inherent deficiencies, such as limited financial resources and insufficient technical investment. When I recently investigated, I found that Alibabas ant financial service is working with them to make up for this shortcoming. Traditional banks are mainly offline, and technology companies focus on online to provide technical support. Offline plus online is a very good model. In the current credit environment of our country, all the risks cannot be controlled by online technology and data. The problem of P2P lies here. Online and offline must be combined. The more banks there are, the better. Regulators should issue more licenses.

In order to help the loan business get its name right, enterprises with experience, technology and good record are encouraged to assist the bank in lending, and small and micro financial business personnel of the bank are trained. The loan assistance platform is equivalent to the secondary contractor between large banks and small and micro enterprises. This kind of business information has low cost and high efficiency, which can effectively help large banks to lend to small and micro enterprises and play a capillary role. Therefore, it is necessary to restore the loan assistance business properly and solve the problem of poor financing channels.

The Beijing News:

In response to the impact of the epidemic on small and micro enterprises, the CBRC has also issued a lot of policies that require banks of enterprises affected by the epidemic not to blindly withdraw loans or cut off loans. What do you think?

Xu Xiaonian:

Dont make administrative orders all in one. On the basis of reciprocity, let enterprises and financial institutions negotiate and solve specific problems. Both sides understand that if the bank breaks the loan, the enterprise will become the banks bad debt. On the contrary, if the enterprise doesnt repay the loan and the bank cant maintain it, who will lend to you in the future? Recently, the e-commerce bank will, from February 2, stop lending to 1.5 million Hubei stores and 300000 pharmaceutical stores that are fighting the epidemic, and reduce the interest rate by 10%, so as to reduce the burden of small stores. This action should be encouraged, of course, the account should be calculated, and the interest should be within the scope of their own acceptance. Wandas announcement of rent reduction is also worthy of praise. Negotiate and compromise, and the salary between enterprises and employees can be adjusted in the same spirit. Beijing News reporter Hou Runfang, editor sun Yong, proofreader Wang Xin, source: Beijing News, editor in charge: Wang Xiaowu, NF

Dont make administrative orders all in one. On the basis of reciprocity, let enterprises and financial institutions negotiate and solve specific problems. Both sides understand that if the bank breaks the loan, the enterprise will become the banks bad debt. On the contrary, if the enterprise doesnt repay the loan and the bank cant maintain it, who will lend to you in the future?

Recently, the e-commerce bank will, from February 2, stop lending to 1.5 million Hubei stores and 300000 pharmaceutical stores that are fighting the epidemic, and reduce the interest rate by 10%, so as to reduce the burden of small stores. This action should be encouraged, of course, the account should be calculated, and the interest should be within the scope of their own acceptance. Wandas announcement of rent reduction is also worthy of praise. Negotiate and compromise, and the salary between enterprises and employees can be adjusted in the same spirit.