On May 19, Zhang Rui, a reporter from the Economic Observer Network, Li Yang, former vice president of the Chinese Academy of Social Sciences and president of the National Finance and Development Laboratory, talked about China's debt management at the inauguration ceremony of the first Shenzhen Financial Forum and Shenzhen Institute of higher Finance at Renmin University of China. He believes that the current round of issuance of ultra-long-term special government bonds is a signal, but China also needs more short-term debt, short-term debt that can be accepted by financial institutions and can set the standard for the financial market.
"with this long debt,GamesonbinancesmartchainIn my experience, short-term debt will not be too far away, so we should prepare for the increase in China's debt. " Li Yang said.
On the same day, Li Yang expounded the main points of debt management in three aspects: why bonds are issued, the structure of buyers of debt, and the sustainability of debt.
Li Yang said that people often argue about debt issues and always feel that it is not a good thing to borrow money. From the perspective of macro-economic operation, bond issuance is to increase government expenditure, and the reason behind it is that microeconomic entities do not spend, enterprises do not spend, and residents do not spend, which results in a huge demand gap in the balance of the national economy.
"if there is insufficient demand from the private sector, it is the government that can only close the gap at this time, and the government is out of money at this time." Li Yang said. He believes that issuing bonds is an inevitable choice, although there are many doubts and worries about it.
Li Yang continued that this round of issuance of ultra-long-term special treasury bonds is only the beginning, and there are still many things to balance in the future. Chinese government leverage has risen passively in the last two years, giving the impression that risk has increased because the denominator, which represents the national economy, has fallen too fast, according to data from the National Finance and Development Laboratory. It is also a reminder that you should be especially careful when using debt instruments in an economic downturn.
On the issue of debt sustainability, Li Yang said that the debt problem is an issue of concern to the whole world since the beginning of this century. "people are saying every day that the US debt is going to collapse, and it doesn't seem to be collapsing," he said. "it has its own law of operation, and the question we are going to discuss now is the extent of the issuance."
Li Yang explained that the sustainability of debt management has a micro definition and a macro definition. From a micro point of view, suppose you borrow money to produce and create wealth, and the new increase in wealth you create exceeds the amount of debt repaid, which is sustainable. From a macro point of view, the debt is sustainable as long as the interest rate paid by the debt is lower than the economic growth rate, so that the cash flow generated by the debt can support the interest repayment.GamesonbinancesmartchainThe other is the ratio of national savings to debt balance, which basically means that for a country, the assets that can be used to pay interest come from the national savings of that country, so the ratio can effectively measure the sustainability of the country's debt.
Li Yang also said that two years ago, they calculated an account based on data from the national balance sheet and found that since 2012, the amount of interest paid by the whole society has exceeded the savings of that year. He believes that there is a certain degree of truth in the so-called saying of "working for a bank".
