China Finance 40 Forum (CF40)

China's leading think tank in finance and macroeconomics - Independence. Insight. Influence.

[China Finance 40 Forum (CF40) @ChinaFinance40]

Read more at https://t.co/4CwV8A1xvO It’s Not as Complicated as a “Balance Sheet Recession” by CF40 Institute 5/5

[China Finance 40 Forum (CF40) @ChinaFinance40]

“Balance sheet recession” is more a description of a macro phenomenon than a complete theory. Simply applying the concept is problematic, as China’s economic data do not meet many of the important characteristics. 1/5

[China Finance 40 Forum (CF40) @ChinaFinance40]

..through traditional Keynesian economic mechanism. Thus we should be vigilant about three main risks, liquidity trap, debt deflation, and the paradox of deleveraging. The key to addressing these risks is achieving moderate inflation.4/5

[China Finance 40 Forum (CF40) @ChinaFinance40]

Read more at https://t.co/7pQxTxO3z5 4/4

[China Finance 40 Forum (CF40) @ChinaFinance40]

The vicious circle of declining expenditures is mainly about “money”: residents are short of money and dare not consume; local governments are short of money; neither dare corporations to borrow nor are they willing to invest, said Zhang Bin from CASS.1/4

[China Finance 40 Forum (CF40) @ChinaFinance40]

One of the three sectors must take the lead in breaking the vicious circle and governments should take this responsibility since it is within their economic management function and requires policy resources only possessed by governments.3/4

[China Finance 40 Forum (CF40) @ChinaFinance40]

Read more at https://t.co/7pQxTxO3z5 4/4

[China Finance 40 Forum (CF40) @ChinaFinance40]

The key challenge in the current economy is not a series of long-standing deep-rooted problems, but rather a “vicious circle” among the spending of households, corporations, and governments, said Zhang Bin, Deputy Director, Institute of World Economics and Politics of CASS. 1/4

[China Finance 40 Forum (CF40) @ChinaFinance40]

Reversing expectations requires policy support stronger than the market’s downward force. The clearer and fuller the policy signal and determination are, the fewer policy resources are required.3/4

[China Finance 40 Forum (CF40) @ChinaFinance40]

...innovating the pre-mortgage model for term housing, innovating the model of debt-transferable mortgages, and innovating the mechanism of floating interest rates for mortgages.
Read more at: https://t.co/76SMefkdHt 3/3

[China Finance 40 Forum (CF40) @ChinaFinance40]

To address the challenges of the real estate industry,we need to boost consumer confidence,said LIU Xiaochun, Vice President of SFI.Improving the relevant policy regime needs to be accompanied by an increased tolerance for risk,which requires the participation of all parties. 1/3

[China Finance 40 Forum (CF40) @ChinaFinance40]

To stabilize and boost the real estate sector, several measures could be adopted, including: ensuring the availability of construction funds for developers, distinguishing between mortgages for term housing and mortgages for existing housing, ...2/3

[China Finance 40 Forum (CF40) @ChinaFinance40]

Read more at:https://t.co/FGbrc2s3zF 6/6

[China Finance 40 Forum (CF40) @ChinaFinance40]

To ensure the sound development of personal credit business, boost demand, help borrowers out of trouble, and maintain social stability, it is necessary to incorporate the resolution of non-performing personal credit disputes into law, said LIU Xiaochun
Vice President of SFI.1/6

[China Finance 40 Forum (CF40) @ChinaFinance40]

.. assessment content,and assessment methods of financial consumer protection.
5.scientific formulation of court assessment methods should not lead to a legal void.
6. in digitizing the law,there is a need to balance the roles of judges and AI in mediation and adjudication.5/6