Local Finance's "Three Connections": Alignment, Support, Response

Recently,China's three major financial regulatory authorities have concentrated on releasing a series of significant policies,coupled with the previous interest rate cuts by the Federal Reserve,both domestic and international financial heavyweights have been unleashed,and the market response has been enthusiastic,with the Shanghai Composite Index returning to 3,000 points.Although financial authority belongs to the central government and market reaction is the most critical,local governments should also keep up,playing their role well under the premise of respecting the decisive role of the market.Practice has shown that once financial policies are solidly implemented at the local government level,they will produce a more sustainable effect.How to respond?From a methodological perspective,local governments can work on the "three connections" of docking,bearing,and responding.

First,let's look at "docking," which mainly refers to the docking of financial and real entity needs.This is a routine financial task for local governments.To this end,local governments need to clarify the key areas of financial services for the real economy,such as small and micro enterprises,scientific and technological innovation,green development,rural revitalization,etc.,ensuring that through policy guidance,financial institutions are encouraged to increase credit investment in these areas,promoting the efficient and equitable service of financial resources to local economic development.

At present,the financing credit service platform has become an important channel and means for local governments at all levels to dock financial and real entity needs.The financing credit service platform is a comprehensive platform established under the guidance of government departments,which collects credit information across departments and fields,and provides credit information services for financial institutions to carry out corporate financing activities.It plays an important role in solving the problem of information asymmetry between banks and enterprises and reducing corporate financing costs.By the end of 2023,national banking institutions had issued a total of 23.4 trillion yuan in loans through the financing credit service platform,of which 5.3 trillion yuan were credit loans; the platform collected more than 78 billion pieces of credit information,provided query services to financial institutions more than 276 million times,and the weekly access volume exceeded one million person-times.On April 2 this year,the General Office of the State Council issued the "Overall Plan for the Construction of Financing Credit Service Platforms to Improve the Financing Convenience Level of Small and Micro Enterprises."

On the one hand,local governments need to enhance the initiative and enthusiasm of various departments to provide information,and expand the scope of credit information collection and sharing.On the other hand,local governments need to steadily open data information to various credit service institutions in a legal and compliant manner by formulating platform authorization operation conditions and standards.

Looking at "bearing" again,it mainly refers to the financial policies between the central and local governments.Local governments need to give full play to local characteristics and formulate implementation details that meet relevant requirements to strive for more domestic and international financial resource support.

At present,by establishing financial innovation demonstration zones,concentrating resources and advantages,promoting financial innovation practices,and forming replicable and promotable experiences,it has become an important measure for local governments to bear the financial policies between the central and local superior governments.Local governments can establish financial innovation demonstration zones to explore various new models of financial and industrial collaborative development,such as establishing industrial cluster financing platforms to integrate the financing needs of upstream and downstream enterprises in the industrial chain,establishing industry-specific investment funds,and supporting innovative projects and startups within the industry.To date,the inclusive financial development demonstration zone in Changping District of Beijing,the financial innovation operation demonstration zone in Tianjin,the green financial reform and innovation pilot zone in Guangzhou,the rural revitalization financial innovation demonstration zone jointly built by Sichuan Province and the Agricultural Bank of China,and the science and technology financial reform pilot zones in Jinan and Hefei have all attracted much attention.To some extent,it can also be said that the construction of Shanghai International Financial Center and the 22 free trade pilot zones across the country also belongs to the category of financial innovation pilot tests.

Looking at "responding" again,it mainly refers to risk prevention and disposal.With market development,there will be some local financial risks,whether in the central and western regions,the northeastern region,or the eastern region,it is the same,it is just that the nature,type,and size of the risks are different.Since the central government "strengthened the responsibility of local risk disposal," local governments have attached great importance to local financial stability work,continuously strengthening the construction of local financial supervision and risk early warning mechanisms,providing a strong guarantee for the sustained and healthy development of the local economy.

At present,there are mainly two types of local financial risks.One is the risk of local financial organizations,which refers to the "7+4" types of local and specialized financial organizations approved and established by local financial supervision and management departments,which may have financial risks.The second is the associated risk,which involves the complex association between local financial institutions and local financial organizations and other economic entities,which may form a risk contagion chain and harbor hidden dangers of systemic financial risks.

On the one hand,local governments need to establish and improve local financial risk assessment and early warning mechanisms to effectively identify and warn of local financial risks.Ensure early discovery,early reporting,and early disposal of risks.On the other hand,local governments need to strengthen the construction of organizational command systems,formulate emergency plans for financial incidents,and ensure that they can take rapid action when financial incidents occur.

For a period of time,financial work conferences in various provinces and cities have been held one after another,and most of them have been renamed and upgraded from "Provincial (Municipal) Financial Work Conference" to "Provincial (Municipal) Committee Financial Work Conference." They have made overall deployments for the financial work of provinces and cities for a period of time in the future,optimized the business environment,strongly supported the private economy,developed new quality productive forces,improved financial innovation capabilities,and built a modern financial system...There is reason to believe that as the local government's attention to local financial development continues to increase,the "three connections" work will become more and more smooth and efficient.