On May 16, the Tsinghua PBCSF Global Finance Forum 2020 draws to a conclusion. Governors, academic and industry leaders from home and abroad joined together for in-depth discussions over “Joining Forces in Finance to Overcome the Epidemic”. The one-day Forum is specially hosted and broadcast live online both in Chinese and English, and covered by over 30 media for global broadcast.

The opening ceremony was addressed by Qiu Yong, President of Tsinghua University and Member of the Chinese Academy of Sciences. He pointed out the significant role that finance plays in enabling the health and safety of humanity as well as in overcoming the epidemic and ensuring economic recover after. “The year 2020 may well mark a historical watershed of human society. History will remember our thoughts, our choices and our actions.”, he said.

Zhang Xiaohui, Dean of Tsinghua University PBC School of Finance made the opening speech. She expressed that, finance to overcome the epidemic in China is never simply stimulation, but to seize the opportunity to reform and open-up, comb through market relations, and construct to introduce a vibrant financial market to the world. It is the key element to the success of China’s financial development, also the basis of a prosperous development of China’s economy. Joining forces to overcome the epidemic and never stop learning, Tsinghua PBCSF will continue to utilize talent cultivation, root in local study and policy research, encourage academic innovation and keep reaching to higher goals, she said.

In the following keynote speeches, Zhou Xiaochuan, president of China Society for Finance and Banking, and honorary dean of Tsinghua PBCSF; Xiao Gang, Member of the National Committee of the Chinese People’s Political Consultative Conference, and Former Chairman of China Security Regulatory Commission; Zhu Min, Chair of NIFR, and former deputy managing director of IMF shared their insights on “the impact of the covid-19 pandemic on the global and Chinese economy”.

Zhou Xiaochuan pointed out the strong need to strengthen financial research to better win the combat against COVID-19. Recently, tremendous measures and policies have been taken by the government and central bank to assist SMEs and policy transmission mechanism has been improved. He emphasized in his speech the importance of research on how the financial sectors and institutions better respond to fiscal policies, the need to pay attention to the quality of financial assets and efficiency of financial market, the accuracy of policies on real economy, and the necessity of emergency response mechanism of financial institutions. During the combat, principles should be strictly set, scopes should be clearly defined and risks should be thoroughly considered for different types of financial institutions such as commercial banks, policy-oriented banks and development banks. Numerous studies and projects should be initiated related to the current economic and financial situations for better future.

Xiao Gang said that China has the unique advantage to combat COVID-19 in the economic way, which is the potential of a super-large scale market, representing by the large quantity of labor force, middle-income groups, new graduates and new-born population on yearly basis. In terms of financial indicators, with comprehensive range of industrial products covering the whole industrial chain, the added value of China’s manufacturing industry has exceeded $4 trillion. The scale of stock market, bond market and private equity market rank second around the world, and China has high levels of national savings rate, abundant foreign exchange reserve, large numbers of assets for SOEs and state-owned financial enterprises. All of these above constitute the large potential of China’s market. He also referred to two ways to unleash the potential, one is to expand increments and the other is to activate the existing stock. For increments expansion, urbanization, digital transformation and infrastructure construction should be accelerated to exploit new demands and new supplies. As for the existing stock, more measures should be taken to increase activation, such as allocating state-owned assets to supplement social security insurance, speeding up reforms of SOEs, expanding REITs to real estate and so on. He also stressed the importance and necessity to well use the potentials to convert short-time stimulus to long-term productivity.

Zhu Min addressed on global equity market. He pointed out that the three-stage sharp declines and subsequent rebounds in the stock market since COVID-19 reflects reasonable reaction, which is the rational prediction of the market in terms of development of pandemic, measures taken by the government and the operation situation of enterprises. Meanwhile central banks provide liquidity support as well as buying assets on a large scale, which boosts the market and leads to the subsequent strong rebound under the intense monetary policy and fiscal policy intervention, especially in the USA. Zhu Min stressed that we are in the first stage of rebound supported by liquidity, but the subsequent stock market trends depend on the recovery level of real economy affected by the epidemic. Nobody can precisely predict whether the epidemic will come back again at fall and winter, but the probability is increasing, especially when it is in the intermediate zone between lockdown policy and economy reopen policy in some major countries recently. The equity market will inevitably fluctuate if the pandemic shocks come again. As for China’s stock market, since liquidity as well as intense supporting policies have been taken in early February to stabilize enterprises, the equity market behaves better than other countries across the world. With the thorough work resumption and the large investments in high-tech and medical fields, China’s stock market is expected to remain relatively better than other stock markets. However, as a member of the global equity market, China’s equity market is certainly faced with adjustments with the fluctuations of global market.

There are no boundaries in fighting the epidemic, the Forum also connects to overseas guests including Michael Spence, Nobel Laureate in economics 2001, and Eric Maskin, Nobel Laureate in economics 2007 for their understanding and judgement of global and China’s economic and financial development.

Professor Michael Spence stated that, the pandemic has brought enormous shock. And China is doing a good job reducing the risk and containing the virus. Though there are still challenges, China is well on way of recovery process. Some of the central banks have eased the monetary policy to buffer the shock and to some extend to reduce the damage. After the certain lockdown point, the action to protect people in turn of health, is very same to what we do to help economic recovery. The recovery won’t be completed if people are not convinced that they are safe. Monetary is aggressive and will be aggressive for a long time, until when the market will look pass the pandemic. The valuation of the market has shifted from tangible to intangible assets in the last ten years. The digital companies are taking big share of the market and they are doing well. The market will finally return to normal, but the market is richly valued under the conditions, and maybe, to some extent, underestimating the bumpiness of the slow recovery.

The biggest financial impact is not yet to come, said Professor Eric Maskin. The pandemic works reversely from financial crisis like former economic crisis in 1930’s and 2008. Because workers are not allowed to work, producers are not allowed to produce which shows huge effects on real economy. He expressed that he is more pessimistic in shorter term, but he is more optimistic in longer term. The global financial crisis brought on by covid-19 pandemic has also accelerated the uptake of digital solutions, and speeding up the global transition towards a Digital economy. 

In the following sessions, the Forum carries around discussions on “Capital Market under the Epidemic”, “Financial Literacy Assisting Modernization of Governance China’s Financial Openness and Financial Governance”, “Financial Innovation and Development in Beijing”, “The Development Trend of Wealth Management” and evening session of “Digital Transformation and Innovation”. The Forum connects experienced officials, industry elites and research experts at home and abroad for deep and thorough discussions.

The 2020 Tsinghua PBCSF Global Finance Forum is hosted by Tsinghua University, organized by Tsinghua University PBC School of Finance (PBCSF) and Institute for National Governance and Global Governance, Tsinghua University, co-organized by National Institute of Financial Research (NIFR) and Institute for Fintech Research (THUIFR), Tsinghua University. The Forum, in its sixth year, has attracted hundreds of renowned policy-makers, corporate executives and scholars to participate in discussions and exchange insights on the opportunities and challenges the industry is facing, raising attentions from the financial services sector, academia and media.