Speech by Xiao Yuanqi at the 15th Asian Financial Forum

Ladies and gentlemen

Good morning, everyone!

It is a great honor to participate in the Asian financial forum. Let me make a few comments for your reference.

The impact of covid-19 pneumonia on human beings is extensive and far-reaching. From politics, economy, finance to human lifestyle, this impact will be long-term and unchangeable. We will enter another new normal. During the epidemic period, all countries and regions have taken some extraordinary policies and measures to deal with the adverse impact of peace and stability. It can be predicted that as long as the epidemic is still rampant, rationality tells us that these unconventional policy measures are unlikely to make significant adjustments and rapid changes. However, we have reason to believe and full of confidence that the epidemic will eventually end. We hope it will end in the new year. The post epidemic era is coming. Now we must seriously think about how to return to normal in the post epidemic era, and smooth the periodicity and possible fluctuations as much as possible in this process.

Next, I will focus on several issues in the field of economy and finance.

First, the exit of loose fiscal and monetary policy. During the epidemic, the world, especially major economies, launched extremely stimulated fiscal expenditure and super loose money supply, which played a positive role in hedging the impact risk of the epidemic. In the post epidemic era, how to withdraw these policies will be a big problem. It is very important to grasp the timing, sequence, mode and steps of exit. In this process, we should now sit together and discuss how the world’s major economies can strengthen cooperation, to what extent they can cooperate, reduce the shock of exit and enhance coordination and consistency, so as to find solutions and a road map.

Second, how to bring inflation back to a moderate level. No matter whether we think inflation is temporary or whether the inflation target can be higher, we must admit that the world has entered an era of high inflation. Looking back at history, there are similar situations, but we have all come here. For example, in the 1980s, major countries experienced excessive inflation and finally succeeded in controlling it. High inflation has an unstable impact on the global market and social life. If Lbx Pharmacy Chain Joint Stock Company(603883) income rises faster than prices, it is likely to cause serious social unrest. We must now think about how to bring inflation back to our affordable target.

Third, how to shape and improve global supply chains to enhance human well-being. The epidemic has had a great impact on the relatively stable industrial supply chain system built by globalization in the past century. At present, the voice of reconstructing the supply chain is heard everywhere. We must think seriously about this. The global supply chain system is based on the comparative advantage theory of international trade division of labor. It is calculated from the perspective of cost-benefit, which is more conducive to all economic units and market subjects. So, in the post epidemic era, how to rebuild the global supply chain system is a big question mark. In my opinion, minimizing the cost and making it most convenient is our goal. The restored global supply chain system must be able to effectively improve human welfare, close contacts and personnel exchanges among countries and regions, and help build a more interdependent, inclusive and watchful community of human destiny.

Fourth, it is urgent to deal with climate change. Climate change is a major challenge facing mankind today, in which there are many uncertainties that we do not know. But what we know is that in the past few decades, the frequency of various extreme climate disasters has greatly increased, and the existing laws of weather change have been broken. Financial response to climate change has a lot to do. For example, how to invest more financial resources in green industries and green enterprises to increase green quality. How to promote clean energy through weight calculation, rating arrangement and carbon emission trading. In the insurance field, how to make up for the loss of the policyholder through claim settlement, and more involve in the functions of climate data monitoring, disaster risk prevention and early warning.

At present, the economic and financial ties between the mainland and Hong Kong are closer. In the financial field, many aspects still need to be deepened and strengthened.

First, wealth management. According to the market forecast, the scale of investable assets of mainland individuals will reach more than 200 trillion yuan in 2021. With the sustained economic development, the per capita asset level will be further improved. Hong Kong can give full play to its unique advantages and realize the global allocation of assets.

Second, reinsurance. Reinsurance needs professional institutions and talents in all aspects, such as security rating agencies, professional lawyers, disaster modeling experts, actuaries, investment managers, etc. With the closer economic ties between the mainland and the world, the demand for reinsurance continues to expand. As a traditional reinsurance center in the Asia Pacific region, Hong Kong can play an important role.

Third, health and old-age insurance. At present, the average life expectancy in the mainland has reached 77 years old, and people over the age of 60 account for 19% of the population. In the era of longevity, people’s demand for health insurance and endowment insurance has increased sharply. The average life expectancy of Hong Kong is 85 years, which is the highest in the world. Hong Kong has experience and practice in developing health and pension insurance. There is great potential for cooperation in this regard.

Fourth, financial technology. Financial services, especially financial services in Hong Kong, have improved rapidly. Covid-19 epidemic has also accelerated the application of financial technology. The market still has great potential. The two places can strengthen communication and cooperation in information sharing and supervision.

Fifth, risk management. Risk management is the core competitiveness of financial institutions. It can not only prevent risks, but also create value and improve the returns of stakeholders. We can share the theory and practice of risk management concepts, tools, products and skills.

Sixth, professional qualification training. Guangdong, Hong Kong and Macao Great Bay area needs a large number of high-quality financial talents, who not only understand the economic operation characteristics of the mainland, but also are familiar with international technology and ideas. It is urgent to train management and operation talents in some professional fields, such as public valuers, actuaries, financial planners, auditors, etc.

Let me say so much today. I wish this forum a complete success!

Thank you!

(source: website of China Banking and Insurance Regulatory Commission)

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