The road of financial development with Chinese characteristics is an important part of the road of socialism with Chinese characteristics, and it is an unprecedented and unique road. Under the guidance of the great party building spirit, the centennial red financial cause has undertaken different major historical missions in different historical periods, from scratch, from small to large, from weak to strong. From the hundred year history of red finance, the path of financial development with Chinese characteristics has the following five characteristics.
1、 Combination of centralization and unity
The centralized and unified leadership of the Party is the foundation of our country, the most essential feature of socialism with Chinese characteristics, and the key to taking the road of financial development with Chinese characteristics.
Concentration and unity complement each other and are dialectically unified. Centralization reflects the relationship between decision-making and implementation. Financial management is mainly the central authority. Major financial policies, strategies, issues and decisions should be discussed and decided by the CPC Central Committee. Relevant departments of the Party and government, local Party committees and governments, financial institutions and financial organizations involved in financial work shall perform their duties according to the authorization, carry out activities according to the specified scope, and report major issues to the Party Central Committee according to the regulations. The unity reflects the relationship between the whole and the part. It means that the whole country plays a game of chess under centralized leadership. That is, the financial work is uniformly deployed, commanded and managed by the Central Committee of the Party. All parties involved in financial work should implement it according to their responsibilities, comply with the unified requirements of the Central Committee of the Party to form a consistent pace and action.
The manifestation and practical effect of centralized and unified leadership are different in different periods. In the period of the new democratic revolution, the Party’s leadership over financial work was in the exploration period. At that time, there was no condition for centralized and unified leadership. The Central Committee of the Party put forward guidelines, lines and requirements for financial work, which were conscientiously implemented in various revolutionary base areas. The Party’s financial work center was to focus on military struggle, fight independently, and implement, develop, practice and create according to local conditions. When the conditions were gradually met on the eve of the founding of New China, the Central Committee of the Communist Party of China planned and deployed ahead of time, started to establish a national centralized and unified financial system, and set up the People’s Bank of China. During the period of socialist revolution and construction, the Central Committee of the Communist Party of China (CPC) made a difficult exploration of the system, mechanism, way and path for the development of the financial cause under the centralized and unified leadership of the Party. Management institutions and business institutions have experienced repeated attempts to establish, abolish and merge. Management and business, finance and finance are also often separated from each other, but always adhere to the principle of centralized and unified leadership of the Party over financial work. In the new period of reform and opening up and socialist modernization, the Party Central Committee has continued to reform the financial system and financial work in terms of leadership system, administrative management, etc. From the perspective of the Party’s management of leading cadres, business supervision and risk disposal of the financial system, it has gone through a process from the combination of vertical and horizontal sections, to the vertical section oriented, horizontal section supplemented, and then to the basic section oriented, local assistance and cooperation. As socialism with Chinese characteristics has entered a new era, the Party’s leadership over financial work has been gradually improved. A financial system operating mechanism has been formed, which focuses on rules and regulations, is determined by the Central Committee, is coordinated and deployed as a whole, is systematically managed, is coordinated by local authorities, handles risks, is implemented by the industry, and is regularly evaluated. The centralized and unified leadership of the Party Central Committee over financial work has been more effectively strengthened and implemented.
2、 Combination of people and entity
The people are the root of the Party’s governance, and the entity is the basis of the comprehensive national strength. The popularity and substantiality of finance stems from the Party’s original mission of seeking happiness for the Chinese people and rejuvenation of the Chinese nation.
The people’s nature of finance is fundamentally to melt the Party’s people-centered concept into financial red capital. The Party has always put serving the overwhelming majority of the people in the first place, and has taken the gradual elimination of polarization and the ultimate achievement of common prosperity as the fundamental starting point and foothold. It always reflects people centered feelings in everything. It is shown in the following aspects. Working for the people means actively working for the interests of the overwhelming majority of the people. In all historical periods, the Party has adhered to the idea of “finance for the people” and has been consistent in its actions. Establish policy oriented financial institutions to support national key strategic projects, major infrastructure construction and development in key areas. Support the development of state-owned, private, mixed and other enterprises, create value, accept employment, and provide the masses with material consumption, service consumption, spiritual consumption and other services. This reflects the service concept of China’s finance. Emphasizing inclusiveness means providing relatively preferential financial services to the largest majority. The Party has always focused on the popularity, coverage and benefits of financial services. It attaches importance not only to the “important”, “large” and “many employed” minority objects, but also to the “ordinary” and “medium-sized” development objects. At present, it pays more attention to the “majority”, “small and micro” and “weak” minority objects who are independent entrepreneurs and self reliant. Entering a new era, we will vigorously build an inclusive financial system and encourage state-owned financial institutions to establish inclusive financial sectors. We will strengthen financial services for small and micro enterprises, agriculture, rural areas and remote areas, and promote targeted financial poverty alleviation. This reflects the central view of China’s finance. Strong protection means paying attention to protecting the legitimate financial rights and interests of the general public. The Central Committee of the Communist Party of China attaches great importance to maintaining the credibility of the currency and RMB in the revolutionary base areas and liberated areas. It has always attached great importance to the scientific prevention and resolution of financial risks, established and maintained a good financial order, and effectively protected the interests of the people. At present, the social attribute of finance is becoming more and more obvious. The Party Central Committee has further strengthened the protection of legitimate financial consumption rights and interests from national policies, laws and regulations, administrative supervision and other aspects. This reflects the concept of financial rights in China.
The materiality of finance aims to consolidate the foundation stone of comprehensive national strength and social wealth. Seen from the surface, the real economy is the direct creator of material wealth and the concentrated embodiment of social productivity, and is an important symbol of a country’s strength and prosperity; In essence, the real economy is the basic carrier of social economic value creation and the real producer of economic value. The real economy is not only of great significance in improving people’s lives and providing jobs, but also plays an important role in sustainable and healthy economic development and effectively coping with external shocks. As the tertiary industry and service industry, finance is generated in the barter, and is the “symbol” of the value of the real economy. Financial development can not be separated from the real economy, which is a three-dimensional mirror reflection of the real economy. The entity reflects the regular requirements of financial operation. The real economy is also inseparable from finance. It relies on the leverage, payment, settlement and other functions of finance to maintain production and operation and rapidly expand reproduction, carry out scientific and technological innovation and technological upgrading, improve competitiveness, and strengthen comprehensive strength. The high-quality development of the real economy must take finance as a strong engine. The relationship between finance and real economy is “exterior” and “interior”, “Mao” and “skin”. Only when the exterior is “exterior”, the interior is “interior” and “interior” is strong, and “Mao” is “beautiful” and “skin” is strong, can we become the king.
3、 Combination of adaptability and safety
Adaptability is the internal objective requirement of the financial operation law, and the necessary condition for the formation of a virtuous circle between financial supply and demand, financial services and entities. Security is the basic bottom line for finance to play a positive role. Adaptability is an important basis for security, and security is the main goal of adaptability.
The adaptability of finance focuses on the organic matching and full integration of financial supply and demand. At the macro level, financial development should adapt to market development, risk control ability, participant eligibility, diversity of financial instruments, perfection of rules and mechanisms, and changes in the external environment. Financial supply should adapt to solving the people’s growing needs for a better life and the contradictions between uneven and inadequate development, and to building an olive society and achieving common prosperity for all people, It should be compatible with ensuring the layout of national strategies, key fields, key industries and core technologies, and with the financial needs of weak links and vulnerable groups. At the micro level, financial supply should match the total demand, term structure, product service and equity nature of the service object. From the perspective of financial suppliers, only with innovative consciousness, spirit and ability can we ensure that we can adapt to financial needs. This is a dynamic process of sustainable and healthy development and an inevitable requirement of the objective laws of financial development. Of course, financial supply should adhere to innovation, the bottom line, and the rule of law to ensure that risks are controllable. From the perspective of financial regulators, we must always adhere to the fundamental requirements of the laws of the socialist market economy, actively and effectively guide the allocation of financial resources in key areas and weak links, and achieve the coordination and balance of equity, income, efficiency and security.
Financial security focuses on preventing systemic financial risks. Finance has the characteristics of tight coupling and strong negative externalities. Financial risks are highly spillover, infectious, and conductive, with wide coverage and great harm. Once accumulated into a systematic risk, it will often lead to an instant collapse of the financial market, which will seriously lead to economic crisis, social crisis, and even endanger the regime. We should be good at using the bottom line thinking method, prepare everything from the bad, and strive for the best results. In today’s world, finance, like science, technology and military, has increasingly become a powerful weapon in national competition and a fighting tool in the game of great powers. In order to achieve the great rejuvenation of the Chinese nation, we must build a financial power. The first and foremost thing is to ensure financial security, which fundamentally depends on whether our financial system is stable, independent, strong and coordinated. To this end, we should not only effectively maintain the security of the domestic financial system, but also constantly improve the ability to effectively prevent and cut off the impact of the international financial market, as well as counter the malicious sanctions and attacks of the West, so as to ensure security in a calm and orderly manner in the face of danger.
4、 Unification of state ownership and market
Capital often implements and reflects the will of its owners. State owned capital can effectively implement and implement the will of the state (nationalization). Other ownership capital often pays attention to market interests (marketization). Under the condition of socialist market economy, it is necessary to organically integrate the political and functional nature of capital with its profitability and activeness, so as to give full play to the political executive power and market influence of public capital, and also fully mobilize the market development and innovation power of other capital.
The nationalization of finance is the key to consolidate the foundation of governance. Finance is a national weapon. State owned financial capital is an important guarantee for promoting national modernization and safeguarding national financial security. The CPC Central Committee and the State Council have made top-level design and key deployment for improving the management of state-owned financial capital. The Guiding Opinions on Improving the Management of State owned Financial Capital has realized the transformation of the country from “managing financial assets” to “managing financial capital”, and has clarified the requirements for four types of state-owned financial institutions: for development oriented policy oriented financial institutions, maintain the nature of solely state-owned or wholly-owned; For financial infrastructure institutions involving national financial security and strong spillover, maintain the absolute control of the state; For state-owned financial institutions with important influence in the industry, maintain the control and leading role of state-owned financial capital; For other state-owned financial institutions in the competitive field, actively introduce various kinds of capital, and state-owned capital can hold absolute shares, hold relative shares, or participate in shares. At present, China has formed a financial market system with state-owned financial institutions as the main market body, multiple ownership financial institutions and domestic and foreign financial institutions coexist, which is full of competitive vitality, has the unity of state-owned and market-oriented, and is the largest financial market system in the world.
The marketability of finance is a “catfish” to maintain market vitality. In order to resolutely implement the intentions and requirements of the political strategy of the Party and the country, and give full play to the functions and roles of state-owned financial capital, we must always adhere to the scientific spirit, follow the requirements of laws, and carry out financial work with the concept, mechanism, tools and means of marketization and legalization. Otherwise, financial capital of any nature will not be able to maintain and enhance its competitiveness, survive, develop and grow, and achieve healthy and sustainable development in the context of marketization. It will be impossible to play the decisive role of the market in allocating financial resources. For state-owned financial capital, in addition to carrying out pure policy businesses, we should adhere to the principle of commercial sustainability, inclusive supply and public access, both to provide financial services and prevent risk accumulation. As for other ownership capital, the Party Central Committee and the State Council actively supported various private capital to enter the financial industry and financial market, basically liberalized the access restrictions for qualified private capital holding or participating in the establishment of financial institutions, and licensed financial businesses, and developed a large number of financial institutions and organizations held or participating by private capital.
5、 Integration of localization and openness
Nativity is Chinese, that is, independence, self characteristics, in line with national conditions, conform to public opinion; Openness is cosmopolitanism, that is, learning from others, exchanging what they have, developing together and contributing to mankind. We should deeply understand the new development concept, deeply grasp the rich connotation of building a new pattern of double circulation, face both the comprehensive and deep opening of the domestic market and the high-level opening of the international market, make full use of the achievements of financial openness, and vigorously consolidate the foundation of financial localization.
The localization of finance is a distinctive feature of the financial development road with Chinese characteristics. At present, the overall quality, level and efficiency of China’s financial development are quite different from those of western developed countries. The western capitalist financial development path is the result of its own historical evolution, which is certainly worth learning from, but it is not completely suitable for our national conditions and people’s conditions. There is no way out for dogmatism and copying. The centennial history of red finance also fully proves that China’s financial development must take its own road and take the road with Chinese characteristics. From the perspective of the scientific origin of the theory, the fundamental basis for the development of finance with Chinese characteristics is the concretization of the guiding ideology of the “Four Confidence” in financial work, which has the characteristics of localized finance. We will continue the centennial spirit of the Red Financial Revolution and great wisdom, create a financial theoretical system with Chinese characteristics, create a great practice of finance with Chinese characteristics, and open up a path for financial development with Chinese characteristics in the great journey of socialist modernization in the new era.
The openness of finance is an inevitable requirement of the road of financial development with Chinese characteristics. Openness brings progress, while closeness inevitably leads to backwardness. The door of China’s opening will not be closed, but will only open wider and wider. Openness means inclusion, exchange and promotion. Opening up can force reform backward, and reform inevitably requires opening up. The openness of finance is not only the inevitable result of the marketization, globalization and financialization of human society development, but also determined by the characteristics of finance itself. Finance has a natural openness, which is a trans temporal value transformation and trans temporal capital allocation. Only in an open environment can we survive, develop and grow. Maintaining the openness of finance can promote us to always maintain the spirit of never slacking off, create opportunities to learn from the world and stimulate the drive to catch up with and surpass the advanced.
The above five pairs of relationships and ten characteristics are an inseparable organic whole, which is a distinctive feature of finance with Chinese characteristics. At present, we should focus on solving the contradictions between modern development and excessive financialization, the function of financial social responsibility and the profitability of financial capital, financial stability and supply and financial risk attributes, financial internal and external links and national financial security at the theoretical and practical levels, in particular, we should focus on curbing the social differentiation amplifier effect of finance. We will scientifically build a modern financial system that integrates and highlights the organic combination of the five pairs of relationships and ten characteristics, is dialectically unified, and is of high quality and efficiency. We will achieve high-quality development and high-level services in the financial industry, and truly play the role of finance as the “core” and “blood” of the modern economy, providing strong support for achieving common prosperity for all people, the second centennial goal, and the great rejuvenation of the Chinese nation.
(Source: China Finance, Issue 23, 2021)