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China's Economy in Global Context

-School Hosts 2017 First Tsinghua PBCSF Financiers Forum


On January 13, Tsinghua PBC School of Finance hosts 2017 first Tsinghua PBCSF Financiers Forum. Guests including Mervyn Allister King, Baron King of Lothbury, Former Governor of the Bank of England and currently economic professor at New York University, ZHOU Hao, Associate Dean and Professor of PBCSF, Associate Dean of Tsinghua National Research Institute of Finance, MING Ming, Fixed Income Research Fellow at CITIC Securities, and David Murphy, Chief of CITIC CLSA China Reality Research Team are invited to join the Forum and give speeches the issue of Chinese Economy and Policy in Global Context. The Forum is jointly hosted by Tsinghua PBCSF, CITIC Publishing Group and CITIC Securities. YUAN Yuan, Assistant Dean of Tsinghua PBCSF, hosted the Forum.

The year of 2016 is “The Year of Black Swan”: Brexit, election of President Trump, leadership crisis in Italy, Brazil and Korea, and the uncertainty it brings to the neighboring area… Where is the global economy leading forward? What challenges and opportunities that Chinese Economy is facing? The questions were raised and discussed in the forum.

In Baron Mervyn King’s speech, he stated that the challenge brought by Brexit is being exaggerated. It is undeniable that both the election of President Trump and Brexit are challenging the traditional economic policy. Yet, as a matter of fact, nothing horrible happened after Brexit. He suggested people should observe the global economy calmly. Baron Mervyn King also pointed out that China has taken up a very important position in the global economy “China has no choice now, but to demonstrate the leadership that is inevitably required in the biggest economy in the world”. China will need to find a way of bringing countries together by pursuing common interest, to restore global economic growth, improving employment and innovation, global climate change and security. 

In ZHOU Hao’s speech, he pointed out that, in regard to the RMB exchange policy, “one of devaluation”, “immediate total float of exchange rate” and “rolling back capital account control” are 3 improper means of policies. “The proper likely choice of RMB reform is to be more on and more relying on flexible interest rate policy to guide the expectations of exchange rate.” ZHOU stated that uncommon to other central banks, Chinese Central Banks has 5 goals to achieve: economic growth, stable inflation, financial stability, external balance and structural balance. The current domestic and global economic trend suggests the Central Bank to apply a stable monetary policy. In regard to RMB trend, ZHOU thanks that, though there are possibility to go the other way, given the US and China’s Economic situation, given the policy review, RMB exchange rate to US dollars would likely to be on the next devaluation like last year. But relative strength will be much smaller than 2015 and 2016.

MING Ming, Fixed Income Research Fellow at CITIC Securities, introduced the Chinese Fundamental economy outlook, and analyzed the trend of fiscal and monetary policy. In the fundamental perspective, the growth rate of Chinese economy is gradually stabilizing. But in the long run, though facing uncertainties, the growth rate will keep rising. In regard to the monetary policy, and speaking from internal market point of view, Central Bank will not likely to keep reducing interest rate or bank reserve. He also believes that an active fiscal policy is likely to be applied this year.

David Murphy, chief of CITIC CLSA China Reality Research Team, analyzed in his speech the Chinese economic change in the short run, and introduced the impact that the population change may have on the economy. On one hand, real estate is still a hot investment target. The implementation of the Property Market Restriction is currently cooling down the market. To achieve a well-off society, Chinese economy growth is gradually shifting to relay on investment in infrastructure and continuous reform on supply side. On the other hand, the aging of population is accelerating, and the increase of income is slowing down, which requires necessary attention.

The forum also hosts round table discussion on the outlook of global financial market development.

The guests pointed out in the session that, the world is entering an era of uncertainty, e.g. the election of President Trump is bringing uncertainties to Chinese economy especially in the aspect of trade protection. While global economy is facing so much uncertainty and Chinese economy growth rate is gradually declining, Chinese economy is still relatively stable, and staying at a stable scale. In the past decades, China has achieved many improvements, and will still outperform other regions in the future.

After round table discussion, the guests also answer questions from the audience about economic slowdown, how to solve aging of population, whether infrastructure investment will become the motivation of 2017 economic growth, etc.

A book signing event was also hosted during the forum.

Tsinghua PBCSF Financiers Forum serves as a platform for promoting communication between acclaimed financiers and the general public. We bring together industry elite and academic stars to share with the audience their expertise and perspectives on domestic and international financial trends.


>Tsinghua National Institute of Financial Research