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The Mainland reiterates that it will benefit the economy and Hong Kong can also learn

2021-07-19T06:09:44.840Z


Earlier this month, when the State Council of China convened a meeting, it once again asked financial institutions to further reduce fees and give benefits to the real economy. This includes reducing bank account and bank card charges, reducing RMB transfer and remittance fees, and


Earlier this month, when the State Council of China convened a meeting, it once again asked financial institutions to further reduce fees and give benefits to the real economy.

This includes reducing bank account and bank card charges, reducing RMB transfer and remittance handling fees, and canceling some bill business charges.

In fact, in the past few years, "fee reduction and profit reduction" may still be quite unfamiliar to Hong Kong people, but it has become a common vocabulary in the financial world in the Mainland.

According to data released at the beginning of the year, the financial system has already given a total of 1.5 trillion yuan to the real economy in 2020.

This is a huge sum of money, and one can't help but wonder why the mainland government should spend so much effort to interfere in the market to transfer interests?

How to do it exactly?


Under the original concept of capitalism, companies do not want to maximize their own interests. Of course, this also includes banks known as the mother of economy.

In order to increase profits, banks and other financial institutions naturally want to increase lending rates and service charges.

However, banks have increased their profits on this side, and on the other side, the borrowing and operating costs of many real economy companies that must rely on banks to operate will increase, squeezing the profits of these companies in disguise.

Undoubtedly, the interests of banks and other financial institutions and enterprises in the real economy fluctuate, and there is a natural competitive relationship.

When the economic development is relatively good, the impact of this kind of competition may not be obvious; but in the difficult economic environment, this kind of competition is likely to threaten some weaker small and medium-sized entities.

Financial institutions benefit the real economy


as a whole economy is more important than individual industries

Marketists generally believe that which side can make more profits is determined by the market itself, and there is no need for the government to intervene.

However, Chinese policymakers tend to believe that the existence of financial institutions itself is to help the development of the real economy. Institutions such as banks provide enterprises with multiple services such as lending, transfer and settlement of foreign exchange, and payment of bills. The purpose is to make the real economy more effective. To operate.

However, if banks squeeze the living space of real economy companies in order to make profits, and even make profits concentrated in the financial industry, the economy will experience a deformed development of "fat on top and thin on bottom", that is undoubtedly putting the cart before the horse.

Therefore, the central government has the idea of ​​letting financial institutions "distribute profits."

The central government can use powerful state-owned banks to lead the reduction of financial system fees, so that the cost of borrowing and other financial service charges will be reduced as a whole, and the related expenditures of real economy enterprises will be reduced, which means that some of the profits that banks can enjoy are transferred. To the real economy enterprises.

The practice of the past few years suffices to show that although the large-scale profit distribution of financial institutions has hit the profit returns of these institutions, and has also caused the domestic banks and Chinese financial-related shares to fall into the bottom, it has been effective in stabilizing the Chinese economy and helping the real economy in trouble. survive.

The latest data reported by the National Bureau of Statistics this year shows that even if the profits of industries above designated size have experienced the new crown epidemic in the first five months of this year, they have increased by an average of 21.7% annually in the past two years.

In addition to ordering the financial industry to transfer profits, the mainland government has also introduced many policies similar to the concept of profit transfers in recent years.

For example, the recent anti-monopoly investigations that have been in full swing are aimed at the large-scale platform economy using exclusive and merger tactics to monopolize the upstream and downstream interests of the industry and prevent other competitors from joining.

To combat the monopolistic behavior of the platform economy, in fact, to a certain extent, these large platform economy companies are also required to cede their profits to other competitors, and competition will reduce prices and improve the quality of goods and services. Eventually, this "profit" will be transferred to other competitors. It is the majority of consumers.

The Wall Street Journal recently quoted news that Tencent and Alibaba, which have been repeatedly named by the mainland regulatory authorities for antitrust investigations, are considering opening their ecosystems to each other. This is obviously a plan for each other to deal with the negative impact of antitrust on them. .

The "Tencent series" and the "Alibaba series" have not communicated with each other in the mainland network system for many years. Many users have long felt inconvenient, but they have been helpless in the past.

The two giant companies are considering interoperability because of anti-monopoly, which to a certain extent also proves that this demand for profit concession can ultimately benefit the general public.

The over-concentration of economic development results and the transfer of


profits will help the stable development of society

From the perspective of neoliberalism or primitive economics, the economic logic of "giving out profits" by the mainland government is an act of "selecting winners". It is the government's crude intervention in the market, and marketists will naturally not agree with it.

However, the neoliberal market economy theory has proven to produce a large number of economic and social problems in the past.

The hollowing out of American industry is the result of economic neoliberalism in the past few decades.

Even in Hong Kong, the laissez-faire economic model has concentrated economic interests in limited industries such as real estate and finance.

According to the statistics of the Census and Statistics Department on Hong Kong's GDP, the gross production value of the construction industry in 2019 was 206.2 billion, but its added value was as high as 114.8 billion, accounting for 55.7% of the GDP.

The profits of the financial industry are also amazing, with added value accounting for 62.5% of GDP.

On the other hand, for manufacturing industries, the added value only accounts for 14.6% of its production price.

Undoubtedly, this reflects that certain industries are sitting on huge profits.

Some marketists always believe that even if these companies are extremely profitable, this is not enough to be a reason for demanding "profits" against them.

However, such an economic structure cannot benefit Hong Kong's economy as a whole, nor can it benefit the general public.

Hong Kong’s industrial unitization and over-reliance on real estate and finance have caused difficulties in economic development in recent years, and interests have been excessively tilted towards real estate developers. The objective result is only to increase property prices and make it more and more difficult for ordinary citizens to afford housing. Sub-district houses with extremely poor living conditions are rampant in developed cities like Hong Kong.

When the self-fertilization of these industries depends on consuming the economy and stability of the overall society, then the government is not what marketists call "no reason" to think of ways to make them profitable.

Moreover, the demand for profit distribution does not mean that these companies should go bankrupt.

In any society, a company must be profitable to survive.

Asking some companies to make profit is naturally not asking them to "cut meat and feed the eagle" to self-dedication, but only to ask them to "make a little less" to give back to the overall economy and society.

It is true that there is a big gap between the economic structure of Hong Kong and the Mainland, and it is really difficult for the Mainland to copy the "profit-making" method to Hong Kong.

The biggest difference is that there are a large number of state-owned enterprises in the mainland dominating certain industries. The central government can instruct and require state-owned enterprises to implement policy objectives. For example, the four major state-owned banks can be required to lower their fees. It is difficult for other private commercial banks not to lower their fees. competition.

Hong Kong does not have a state-owned enterprise economy, and it is impossible for the government to order private companies to implement policy objectives. For example, the Hong Kong government cannot require mainland banks to "cut fees and make profits" like the Mainland.

However, by formulating macroeconomic policies and specific legal rules, the Hong Kong government can also achieve the goal of letting certain industries make a profit.

For example, by adjusting housing and land policies, increasing the supply of residential buildings, and restricting rent increases, the goal of profit distribution has been achieved.

For real estate developers who are sitting on large profits, although "profits" will inevitably affect their vested interests, it will not prevent them from doing business.

Recently, both the government and the establishment have often mentioned the need to "integrate into the overall situation of national development." With reference to the development of the mainland economy, the spirit of "giving benefits" that the mainland government has valued in recent years is undoubtedly worth learning from Hong Kong.

Policy makers should absorb the spirit of the Mainland’s “profit-giving” policy, and work to balance social and economic development, and avoid the concentration of profits from economic development in the hands of a small part of society; through the implementation of various aspects of economic reforms, the entire economic structure will “scrape the bones”. "Cure drugs" will enable Hong Kong's capitalism to develop healthier and long-term, so that Hong Kong can truly achieve long-term stability, prosperity and stability.

Comparing the enlightenment of China's RRR cut and the U.S. tightening. To make Hong Kong's quality of life catch up with the cost and to protect people's livelihood is also part of national security.

Source: hk1

All news articles on 2021-07-19

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