Investors Need Not Hesitate To Take Stock Market Fundamentals.

The Shanghai Composite Index hit a new low recently, close to the lowest point since this year, the lowest point in 2015 when the gem broke down, and the Shanghai Composite Index has been trading low for 17 consecutive trading days.

Although the economic fundamentals and policies do not support the continued decline of the stock market, the unstable mood has spread, and some reactions have taken place.

It is very important to comprehensively and objectively view the current economic situation, understand the relevant policy intentions in a comprehensive and accurate manner, stabilize market expectations, and do a good job in financial supervision, including stock market supervision.

First of all, the regulatory authorities to rectify some financial areas, objectively promote some funds to reduce risk preferences, and in the short run, there is a certain pressure on the stock market operation.

But I am too worried about this and even think that the stock market will enter a new round of deep adjustment.

At present, the main purpose of financial rectification is to investigate and handle risks and consolidate the foundation of financial reform and development.

As far as the stock market is concerned, it has not stopped the risk investigation since February 2016 and has achieved remarkable results.

After a big adjustment in the second half of 2015, the downside risk of the market was not increased, but greatly reduced.

The stock market supervision policy is three-dimensional and multi-faceted. It includes both restrictive measures such as asset restructuring and refinancing, and incentive measures for cash dividends and small shareholders' rights, including short-term measures to curb sub shares, pure concept speculation, and long-term measures to improve information disclosure system.

All measures are aimed at establishing a good market ecosystem of survival of the fittest, high quality and high price, and eliminating the disadvantages of over speculation and insider trading.

This is the greatest protection for rational investors, and is conducive to the formation of an investment climate centered on performance and growth.

Although there are market adverse factors such as poor hot spots and tight funds, the adjustment since mid April is still excessive.

I believe that the development and innovation of the financial market will not stop because of rectification. The keynote of steady progress will not change. The economic fundamentals and dividend policy will support the market to stabilize.

Second, we must maintain financial security and prevent and defuse it.

Considering the linkage between promoting financial reform and development, we should fully understand the connotation of policy.

We need to deepen reform to realize the financial development tasks of the 13th Five-Year plan.

General secretary Xi Jinping, who presided over the fortieth collective learning of the Central Political Bureau in April 25th, pointed out that to maintain financial security, we must stick to bottom line thinking and stick to problem orientation. On the basis of doing a good job in financial work, we should deepen financial reform, strengthen financial supervision, scientifically prevent risks, strengthen security capability building, continuously improve the competitiveness of the financial industry, resist risks and sustainable development capabilities, and firmly defend the bottom line of systemic financial risks.

He also referred to "financial activity, economic activity, financial stability, and economic stability".

The general secretary's discussions have comprehensively outlined the main aspects of financial work such as deepening reform, strengthening supervision, preventing risks and improving capabilities. We should thoroughly understand and implement them.

The Secretary General's spirit of speaking about financial work should also be combined with the content of the "13th Five-Year plan" on the reform of the financial system.

The "13th Five-Year plan" special chapter discussed the reform of the financial system. The general formulation is "improving the financial institutions and the market system, promoting the healthy development of the capital market, improving the monetary policy mechanism, deepening the reform of the financial regulatory system, improving the modern financial system, improving the efficiency of financial services entities and supporting the ability of economic pformation, and effectively preventing and defusing financial risks".

In the three section, this chapter discusses the system of "enriching the financial institutions", "perfecting the financial market system" and "reforming the framework of financial supervision", so as to clarify the tasks and roadmap for the development of financial market.

We are talking about maintaining financial security, not just peace and stability, not the "peace" of inefficiency and innovation, but to deepen the structural reform and promote the development of financial market under the premise of keeping the bottom line of risk.

The maintenance of financial security and stability should start with "responsibility" and "finally for the people".

That is to say, all the subjects engaged in financial work should stick to social responsibility. The ultimate goal of financial security and stability is to serve the people and improve people's well-being.

To make the financial system, financial institutions, financial products and financial activities truly serve for the development of the real economy, the adjustment of the economic structure, the creation and innovation of the main bodies, the enhancement of competitiveness for the enterprises, and the effective management of the wealth and safety of the residents, the platforms, mechanisms and rules that complement the real economy will be formed.

Financial institutions, financial regulators and participants in the financial market should act in accordance with the law and act according to law.

Matters that are clearly defined by laws and regulations should be done according to the norms of laws and regulations, and can not challenge the authority of laws and regulations. At the same time, laws and regulations are always incomplete, and there are always lagging behind the market.

Financial markets should be "moral and legal", and we must adhere to the rule of law and rule by virtue.

We must seize the favorable opportunity to do well in the work of financial security and stability so as to promote better and better development of finance.

We need to deepen reform to realize the financial development tasks of the 13th Five-Year plan.

Third, actively regulating the development of multi-level capital market is a historic task and we must continue to do it well.

In April 25th, general secretary Xi Jinping put forward 6 tasks on maintaining financial security, the fourth is "creating a good financial environment for the development of the real economy".

We should enter the channels of the real economy, actively regulate the development of multi-level capital markets, expand direct financing, strengthen guidelines on credit policies, encourage financial institutions to increase financial support for advanced manufacturing and other fields, and promote structural reforms on the supply side.

Among them, "actively regulate the development of multi-level capital market, expand direct financing", clear the next stage of the work of the capital market.

Zhou Xiaochuan, governor of the central bank, said in March 20th this year that there were different views on financial services for the real economy.

He believes that from the point of view of game theory, it can be divided into three categories: that is, the financial industry and the real economy can be a win-win situation, or a zero sum game, or a lose lose situation.

For China, there should be at least one initial conclusion: if the financial industry can not develop better, provide more universal financial services, and provide products that are more in line with market demand, then the real economy will be restricted.

I agree with Zhou Xiaochuan's analysis. First, China has maintained a high savings rate for a long time. In 2016, China's total savings rate was around 46%, of which the residential sector was more than 35%.

High savings rate and social debt

It will be on the high side.

The debt ratio of Chinese enterprises is higher than that of other countries.

Second, the high debt rate of non-financial enterprises leads to macroeconomic risks and needs to be solved.

One of the key tasks of the central side's structural reform of supply side is "deleveraging", which is very clear.

To solve the above macroeconomic and financial system imbalances, we need to expand the scale of the capital market and expand the proportion of investment in household equity.

After 38 years of reform and opening up, the accumulation of private wealth has increased, and residents' capital consciousness has increased significantly, which has created conditions for the development of multi-level capital market.

Through perfecting the system construction of capital market, strengthening supervision, improving services, attracting more private capital to participate in the stock market in direct and indirect ways (funds), it is an established goal and a historic task.

According to the central plan, capital market development should continue to carry out the "five adherence", that is, adhere to the important concept of strict supervision and strict supervision, adhere to the bottom line that does not involve systemic risks, persist in putting the protection of investors' legitimate rights and interests in a prominent position, adhere to the reform direction of marketization, legalization and internationalization, strive to improve the international competitiveness of the capital market, adhere to the fundamental purpose of serving the development of the real economy, and coordinate the reform, stability, development and supervision.

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