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Dean's View |A Speech of Zhang Xiaohui at the 2021 Tsinghua PBCSF Global Finance Forum

Time: 2021-06-03 08:28 Print


The 2021 Tsinghua PBCSF Global Finance Forum themed "New Pattern, New Development, and New Finance" was held in Beijing on May 22-23, 2021. Zhang Xiaohui, Dean of Tsinghua University PBC School of Finance (PBCSF), attended the forum and delivered a speech.

The following is the full text of her speech at the forum.

Distinguished President Zhou Xiaochuan, President Qiu Yong, Vice President Li Bo, Vice Chairman Xiao Yuanqi, and Chairman Liu Liange, guests and friends,

Good morning! First of all, please allow me, on behalf of all the students and faculty of PBCSF, to express a warm welcome and heartfelt thanks to all the leaders and guests at present, as well as to the audience from home and abroad who are joining the forum here and online.

Themed on "New Pattern, New Development, and New Finance" Tsinghua PBCSF Global Finance Forum is at 7th year. The Form has always focused on the theme of the times as well as hot topics and difficulties in global finance and China's financial reform. We come together to pool insights and exchange ideas, hoping to contribute to the financial development in China and beyond.

Over the past year, the internal and external environment we are facing is becoming more severe and complex. We are facing a mixed picture. On the one hand, China has made considerable progress in fighting against the epidemic and the domestic economy has returned to normal. On the other hand, the economic recovery is not yet on a firm footing, and the pace of moving towards normalization is not in sync across sectors. In particular, consumption, a key area in the transformation of China's economic development mode, is still in the restoration phase. The recovery of household consumption is relatively slow, which is lower than the pre-epidemic level. Statistics show that household deposits are still growing rapidly in the first three months of this year, indicating that resident’s willingness to consume is not strong, which is a reminder that the long-term impact of COVID-19 on the economy is far more complicated than the figures show in the report. The uneven impact of the epidemic on different sectors and areas will also affect China's economic operation in a profound and complex manner for a considerable period of time in the future, which is an important factor that must be taken into account when formulating economic and financial policies. The external economic and financial situation is still complex. Along with the measures of vaccination, there seem to be signs that the world's major developed economies are emerging from the mire of recession and slowly gearing onto a road of recovery. But the rapid spread of the epidemic in India, Brazil, and other developing countries warns us that the virus may return at any time. Economic data has also confirmed that the recurring epidemic and the misaligned vaccine penetration have led to a slow recovery of the global supply chain and that the current recovery progress is very weak and the "turning point" for a full recovery of the world economy is far reaching. 

With the rising trend of accelerating global commodity price, it is of growing concern that US inflation may be at risk of out of control under the excessive fiscal stimulus, and the Federal Reserve's monetary policy will speed up. In the finance sector, some developed countries have injected large amounts of liquidity into the economy over the last year in order to combat the impact of the epidemic on the economy. As such, moderate and timely management of the pace of economic recovery,  the expectations of market players, the national policies, and the exit from this unconventional monetary policy is always a problem for the monetary authorities. Instead of adopting strong stimulus policies or unconventional monetary policies such as QE, zero or negative interest rates, China is more inclined to enhance the financial sector's capability of serving the real economy. However, we still need to be alert to the possible short-term impact of monetary policy shifts from developed countries. While the domestic economy is generally optimistic, with weakening marginal momentum and an unstable and unbalanced recovery, we need to pay close attention to changes in global asset price inflation and the financial over-leveraging and instability that may follow, and be prepared to respond in different inflationary scenarios. Especially, we need to manage expectations properly, and be wary of overheated investment in some areas due to rising structural inflation.

Looking back at the internal and external challenges that China has experienced, lessons are learned. At present, the international environment is becoming increasingly complex. The instability and uncertainty have increased significantly. Potential risks caused by the dependence on external demand are growing. In addition, China's economic potential has yet to be fully released. The problem of unbalanced and insufficient development is still salient. These require us to make good use of the window period with less pressure on stable growth, intensify structural adjustment and reform and shape a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. 

Finance, as the core of the modern economy, is duty-bound to become a key driver in shaping the new development paradigm. As such, at this year's forum, we focus on financial development under the new development paradigm, explore how to improve the ability of finance to serve the new development paradigm, and examine how the financial industry can play a role in better utilizing domestic resource endowments, better integrating the domestic and international markets, better meeting the needs of the people, better supporting the expansion of domestic demand, and better preventing and resolving major risks, in an effort to promote the low-carbon, green and healthy development of China's economy in the midst of reform.

This year marks the 110th anniversary of Tsinghua University and the 40th anniversary of the PBCSF. In March 2012, the People's Bank of China (PBC) and Tsinghua University jointly established the PBCSF on the basis of the Graduate School of the PBC. Based on Tsinghua's rich history and inheriting the Tsinghua spirit of "self-discipline and social commitment", the PBCSF follows the tradition of "endeavor, innovation, harmony, and contribution" and has put forward the mission of "leading finance education and research for national and global prosperity". Over the past nine years, thanks to the support from the Tsinghua University and the PBC as well as concerted efforts of the School's faculty, students, and staff, the School has made leap forward development in building a strong faculty team, reshaping the talent training system, developing a research system, and serving national strategies. Nowadays, the School has grown into one of China's most outstanding institutions for financial education and is making every effort to build a top financial school in the world.

We will build on past achievements, strive for new progress, and practice with a wealth of learning. 2021 is the opening year of the 14th Five-Year Plan. We are deeply aware of the new great opportunities the School is facing. Based on the tradition of integrating education, academics, and business, the School is working to nurture more talented people. Guided by a problem-oriented, objective-driven, and result-based approach, it is seeking to shoulder due responsibilities and answer the call of the times.

Today, guests from home and abroad gather online and offline to exchange ideas on "New Pattern, New Development, and New Finance". Under this theme, we also focus on the following topics: "The New Dual Circulation Development Pattern and Financial Reform and Opening-up", "Global Economic Governance under the Changing World", "Building the New Order of Financial Supervision", "Digital Economics Boosting Global Economic Recovery", "Development Prospects of  Infrastructure REITs", "Science and Technology Promoting High-Quality Development of Finance Innovation", "Report Release China Financial Policy Report 2021", "Capital Market Motivating Technology Innovation", "Finance-Driven High-Quality Development of Culture and Tourism Industry", and "The New Normal of Global Tech-Driven Insurance and Pension Industry". I hope you will enjoy the communications, and exchange ideas and share your valuable insights, to reach for consensus and contribute wisdom and strength to the financial development in China and the world.

Last, thank you all for your continued support to the School, and wish the forum a great success.

Thank you!