From July 14 to 15, the National Financial Work Conference was held in Beijing; General Secretary Xi Jinping attended and delivered an important speech. The [Learning Moment] column produced by Guangming Today today invites Guan Qingyou, chief economist at Minsheng Financial Think Tank, to share his understanding of the General Secretary's important speech. 

　　Interview transcript

　　Hello everyone, welcome to Guangming Today's “Learning Moment.” I am Guan Qingyou. Today I will study together with you the key content of the Fifth National Financial Work Conference, focusing on interpreting and sharing the three tasks in General Secretary Xi Jinping's speech.

　　The three tasks are serving the real economy, preventing and defusing financial risks, and deepening financial reform. Serving the real economy is essentially about resolving the relationship between finance and the real economy. Why is this raised? Because in recent years finance and the real economy have become disconnected, giving rise to asset bubbles and idle financial circulation, which invisibly raises financing costs for the real economy and undermines the “cost reduction” goal of supply-side structural reform. Thus, serving the real economy means bringing the entire financial sector and financial business back to its original purpose — truly serving the real economy. This requires every type of financial business to serve according to its original purpose, rather than pursuing generalized financial expansion.

　　The second task is to prevent and defuse financial risks. When finance and the real economy disconnect, financial risks inevitably follow; such risks exist not only in China but in all major economies worldwide. This is related to the quantitative easing policies widely adopted globally after 2008. At the micro level, corporate leverage is relatively high, and these companies are linked to financial institutions — banks, trusts and securities firms. Once these companies run into trouble and the funding chain breaks, it can spread to every entity along the whole debt chain. The impact of this accumulated risk cannot be underestimated, so resolute top-level measures must be taken to guard against it.

　　The third task is to deepen financial reform. To address the disconnect between finance and the real economy and prevent financial risks, we must deepen reform of the financial system. This conference effectively clarifies macro-prudential management — bringing different financial entities under supervision within a unified financial framework, preventing risks caused by regulatory gaps. Thus, the conference proposed establishing the State Council Financial Stability and Development Committee, which will play a very large role and help us resolve the disconnect between finance and the real economy and the accumulation of financial risks.