[View Industry Reading Policy] Yang：Monetary policy will tighten

[View Industry Reading Policy] Yang：Monetary policy will tighten：Member of the Chinese Academy of Social Sciences、Chairman of the National Finance and Development Laboratory Yang Yang, Chairman of the National Finance and Development Laboratory, spoke about "Debt" at the 2025 Fudan Economists Forum、Leverage and Monetary Policy" delivered the following speech。It talks about a lot of interesting things，Share with everyone。Yang：Let me talk about five questions。

Let’s look at deleveraging first，Deleveraging is a necessary condition to rescue this crisis，Needless to say this。in china，understanding of this issue，In fact, there is a level。

At last year’s Central Economic Work Conference，Provide an overview of the current economic problems we are facing and the economic problems associated with these economic problems.：a period from now on，Main risks to my country’s real economy，will be reflected in the decline in economic growth，excess capacity，Increasing business difficulties and rising unemployment。This is reflected in the real economy。

as his mirror image，There must also be some performance in the financial field，That's when leverage goes up，Debt burden increases，become non-performing assets。The National Financial Work Conference in July this year reflected this judgment.：The source of financial risks lies in high leverage，This confirms the next step to rectify the financial order.，Just strengthen supervision，The focus of all work is deleveraging。

The issue of deleveraging，It's becoming more urgent now，We say that international rating agencies have continuously downgraded my country’s sovereign credit，Highlights the urgency of our deleveraging。May 24 this year，Moody's downgraded our rating，Its reason is that the debt scale of China's real economy will grow rapidly，Everyone remember，This matter needs to be tested，Relevant reform measures are unlikely to yield results，He gave a very negative review，The government will continue to pass stimulus policies，Maintain growth rate。

Doesn’t what we say today refer to the next five years? He saw our situation for five years。

on September 21st，S&P also downgraded our rating，The basis is a long period of strong credit growth，Increased financial risks in China’s economy，At the same time, although the government has recently stepped up efforts to control corporate leverage levels,，Expected to stabilize medium-term financial risk trends，But they expect credit growth to remain high in the next two to three years.，Will continue to promote the gradual increase in financial risks，We can all test this again。

Of course we disagree with these institutions，As a national think tank，these past few months，We are also in intensive discussions with international rating agencies，told them some of our views，Our algorithm，and our reviews，They also told us some of their opinions，their judgment，especially told us，What is the focus of their judgment?。

The main problem actually involves two aspects，One piece is the real economy，On fundamental issues，There is no controversy at home or abroad，Now when we are refuting them，We like to refute them with fundamentals，But when they downgraded us，I don’t deny that you have good fundamentals，This is chicken and duck talk，Can't discuss on one issue。

But on the issue of high leverage in financial risks，Our recognition capabilities、Management and control capabilities and effectiveness，There is still room for further improvement，In other words, the country’s ability to manage financial risks needs to be improved.。we noticed，When international organizations evaluate us，Mainly to evaluate abilities，Gives us the result of downgrading，We think it's a rock from another mountain，Worth studying seriously。

But in this case，We don’t want foreigners to talk，The government has deeply realized this problem，After more than two years of research，Keep going deeper，We now have a financial work meeting，The meeting identified a series of measures to strengthen supervision，Measures to prevent risks，These measures are based on institutional mechanisms，Solving China’s High Leverage and High Debt Problems，Therefore, we should directly and positively respond to the doubts of the international community.。

It’s a pity that the international community has not listened carefully.，Still insisting on going his own way，Downgrade us。Let’s talk about the second thing now，In fact, we have been talking about deleveraging since 2007.，But whether it is international or domestic，Deleveraging is very different。

A very important reason is that deleveraging is an austerity measure，Stabilizing the economy must increase leverage，When the financial structure does not change，Without revolutionary breakthroughs in the use of financial technology，Deleveraging and stabilizing the economy are contradictory，So when the downward pressure on the economy is still great,，While the global economy is still not improving,，Stabilizing the economy is a policy priority for countries around the world，So deleveraging always takes a loss。

So we see that the world is now talking about deleveraging.，However, the results of deleveraging are not significant.。deleveraging，Deleveraging involving the financial sector，It also involves the deleveraging of the real sector.。Leverage in the financial sector climbed sharply in the early 2000s，rose until it triggered the financial crisis，adversely affected the real economy。So from then on，all the way down，Deleveraging is now basically successful。

but，The leverage ratio of the real economy has been rising，So when we are discussing this very complex issue，First we need to figure it out，Deleveraging in the non-financial sector and deleveraging in the financial sector are two different things.。

And the so-called deleveraging of the financial sector，Foam，What we said at the financial work conference，Circulation within the financial system，Bank A sends something，Bank B buys，Bank B sends something，Insurance company buys，The insurance company sends something，Securities company buys，Just don’t give it to the real economy，financial circulation。This process has nothing to do with the real economy。

Deleverage now，Just squeeze down the superstructure，Let finance return to simplicity，return to standard，Return to the court，Return to table、Return to offline、Return to one's heart，here's what to do。But for the deleveraging of the real sector，It can't be said simply。

Because it is a result of technology，Because the company，Especially in the current industrial economy，good company，will rely on external financing，This is determined by technology，Reliance on external financing，There is leverage，Therefore, the leverage ratio of the non-financial sector is determined by the technical conditions of the real economy sector.，level of economic development，Determined by the stage of economic development。

It’s not that you just want to lower it.，As soon as the economic development speed drops, it will slow down.，So we have to remember these two lines，When it comes to deleveraging，Be sure to talk about the two departments separately.。Let’s look at the situation in the United States，We are divided into four departments，Its household sector deleveraging succeeded，Financial sector deleveraging successful，everyone knows，Residential sector leverage success，Resident debt has decreased，At the same time, it also connected an industry，Residential deleveraging has been basically successful。What about the company?

local stability，So in these times of crisis we are now，When researching debt issues，We discovered a problem that we have to pay attention to，No matter how risky the U.S. economy is,，No matter what the crisis is，Its business is quite stable。This is the performance of a mature economy。This is the difference between developed economies and emerging economies，When will our business let the storm rise?，While sitting firmly on the fishing boat，Our economy will be stable，become a developed economy。

What I want to point out is，General government leverage ratio，rapid climb。Based on this situation，We can draw a conclusion，The so-called success of U.S. deleveraging，Many media now report this，I don't agree with this view at all。Nothing more than a successful leverage transfer。Much of the financing used by American households is mortgage loans，MBS、ABS。

When the Fed rescues the market，This is what I bought，The process of buying is to attach the original property to the property.，debts attached to households，Take it from the central bank，This is called transfer。So it just transfers successfully，So further we have the inference。The U.S. economy will not do well in the next three to five years，Because it has three problems。First，Government debt has accumulated hugely。

You say it reduces taxes，Tax cuts are great，But tax cuts must be placed within the framework of an overall budget，Only then can we evaluate whether it is feasible。Because if your side is heavily in debt,，We need to reduce our income here，How do you feel about yourself? Trump came to power and talked about trillions of dollars in spending，Where does the money come from? You're already in debt。second，Monetary policy needs to return to normal，and the Fed shrinking its balance sheet。

Returning to normal has many aspects，Interest rate hike is just an outpost，What really hurts people is shrinking the table，Shrinking the balance sheet is withdrawing funds from the market，Expanding the balance sheet means putting funds into the market。So the U.S. market，The newly recovered real estate market，Can you tolerate this reduction? I doubt it。

So we see the Fed，About balance sheet reduction，twinkling，secretive，He has tens of trillions to shrink，Let’s talk about China，China at the financial work conference，Talking about the eight major risks，One of the risks is external shocks，This is where external shocks come from。If U.S. government debt continues to rise，Affects U.S. interest rates，impact dollar。If he continues to shrink his balance sheet，Affecting the cross-border flow of funds，It’s a very big impact on us，we must pay attention。

Next let’s look at China，The leverage ratio of China’s non-financial sector suddenly increased since 2009，2009years ago，Very stable，2009Everyone remembers the year，This is a 4 trillion fiscal stimulus，9.6Trillions of new credit，That is to say，at this time，We have invested huge amounts of money in the market，these funds，all become debts。The situation of the following residential departments，Chinese residents originally had no debt，Therefore the leverage ratio is not high。

So now many people doing policy research，Hoping to increase residents’ leverage ratio，to absorb leverage from other departments。muddleheadedness，2025The stock market crash，This is the driving factor behind，in fact，Our market does not accept confusion，2009Year，This is a starting point for it，2009yearly increase，Out of control from now on。

non-financial corporate sector，We want to see before 2009，Leverage ratio of China’s non-financial corporate sector，It's also very stable，It's very healthy financially，2009Such a thing happens in a year，and its dramatic expansion since then.，strong stimulation，causing such a result。Over here，This is how we start to raise the first question that everyone should pay attention to:，The rising leverage ratio of non-financial companies deserves attention。

Foreigners criticize China’s finance，Criticizing China’s Leverage，That's what I'm talking about。2008Year，Our corporate leverage has always been stable within 100%，and after，The rise is more obvious，Horizontal comparison，Only 80% of the United States，We are still far behind developed countries。From a structural point of view，China’s non-financial corporate debt，65%It is a state-owned enterprise，And since the crisis，In the process of deleveraging，Non-state-owned enterprises are deleveraging very quickly。

However, there are some situations that we don’t want to see，For example, run, run, run，Eliminate all assets and liabilities，This way to deleverage，but，In short, the non-state-owned sector is deleveraging faster.。When the problem comes to state-owned enterprises，It's troublesome，Since the reform, it has been a state-owned enterprise，Until now，Or a state-owned enterprise?。This word，Sometimes it’s hard to say too much，Just a reminder。

This financial work conference clearly pointed out that，The outstanding problem with my country’s debt is that some state-owned enterprises are too risky，to solve this problem，So I really hit it to seven inches.。Let’s look at the government，Put the center and the place together，The same trend started to rise in 2009，overall situation，It should be said that there is no problem，There is no problem if we put them together.。

So from the perspective of debt ratio，Depending on the estimated caliber，By the end of 2025 we，The scale of local government debt nationwide is approximately 22.7% to 28% of GDP.，Attention everyone，We are now given an interval number，This is also for the sake of working with Moody's，S&P Negotiations，Because the big difference in our leverage ratio in China is the caliber.，You said this is a debt，This is not a debt，What does it look like when we give a debt?，What does it look like if it’s not debt?，There is an interval。

The Chinese government’s debt ratio ranges from 37.4% to 43.1%，This piece falls on the final value of their A-rated sovereign government's debt burden in 2025.。Why do you use caps?，You can't use my terminal value，It's best if you use my lower limit，He dare not，He uses your upper limit，He said again that you exceeded，You exceed this final value，So I demoted you。

We feel that the U.S. government，Overall government debt remains within safe range，These institutions downgraded our sovereign credit rating，The basis is insufficient。This is the second problem with this debt，In recent years, local governments，has been a big problem in our economy。2025years ago，Local government debt surges，Land for sale cannot be sold out，After this road is probably blocked,，Then we started issuing bonds.。start borrowing money。

2025years ago，With the release of a document from the Ministry of Finance，The National People's Congress has made a decision，got cleaned up，But hold this end，那边飘起来了，There are currently four means of potential government liabilities:：First，Government Investment Guidance Fund。second，Special construction fund。third，Government entrusted construction and purchase service agreement。fourth，PPP。As soon as I say this，The students already know what they are doing，these things，Isn’t that what we are studying?

We give advice to others，Isn't that what it is? This thing is that the means of adding new debt are limited.。So for the Chinese government，Especially the debt problem of local governments，Still need major surgery，No major surgery，China's debt problem，Leverage problem，Will always be criticized by the outside world。

Of course this is a big deal，It’s not a simple matter of borrowing money，Why does the Chinese government borrow money?，Being chased every day，Looking for solutions everywhere，That's a problem of institutional mechanism。therefore，We need a comprehensive reform，to provide incentives for local governments to reduce their debt，There are four main：First，Further rationalize government-market relations，do less，Why don’t you stop borrowing money? Everything needs to be done now，Just need to borrow money。

second，Hardening government budget constraints，His budget is soft，Can be borrowed from the public，You can ask the government for money。

third，The most important thing is to let private capital enter the fields you are currently doing.，But these fields have been calling for a long, long time，That means not coming in，We have mentioned at least a few reasons here.：One is that property rights cannot be protected，November 3 last year，Joint document issued by the Central Committee of the Communist Party of China and the State Council，Opinions on strengthening property rights protection，Reaffirm the property rights of non-state-owned capital，sacrosanct。

Once again exempted from its original sin，When dealing with problems, the old and new laws，from old，be lenient。This is already very lenient in the legal system and cannot be lenient any more.，However, private capital still does not enter。There is another reason，Your government has no reputable institutions，It doesn’t matter what you say，Especially when the government changes so quickly，The government's successors will not acknowledge their past mistakes，This is a common phenomenon，Who am I looking for? There is also an unpredictable institutional framework。So in this regard，Further efforts are needed。

fourth，Straighten out the financial relationship between central and local governments，This is a big topic，The Third Plenary Session of the 18th CPC Central Committee proposed，But it didn't happen，We await further realization after the 19th CPC National Congress。China's external sector leverage ratio is not high and is the best in the world，None，it is the best，Because we actually have a lot of net external investment positions。this is a situation，We are all talking about debt。

debt，Debt always has a reason，in this process，it has asset formation，Especially when analyzing China's problems，The question of assets，In particular, we need to pay attention to，Because if developed country governments engage in debt financing，Mainly to make up for its public consumption，Closing the pension gap，China basically uses it for investment。

Different uses，The result is a world of difference，we talk，If the debt is used directly for investment，These investments form assets，and generate cash flow，This laid a reliable material foundation for debt repayment，On the contrary, it will reduce the risk。Let me report to you one of the most recent tasks we have done.，Since this century, China，National Capital Sheet，We have settled this account clearly。

According to this account，2025Year，Calculated according to wide diameter，China’s sovereign debt is 139.6 trillion，Sovereign assets 241.4 trillion yuan，Net asset value is 101.8 trillion yuan。Is there anyone better than us today? we take the land、building deduction，Only reserves remain，Only gold remains，白银和我们在国外资本市场上的上市公司，There are 20.2 trillion more，very high，very high。

So no matter how you calculate，There is no risk of solvency in China，The risk of a crisis in China is very low，Ignore this characteristic of China，That's jumping to conclusions，We think this is irresponsible。We say China's debt problem will not be a problem，There is another very important reason，China has been a country that saves more than it invests since 1994，overall，We are exporting capital，instead of inputting capital。

But international rating agencies still downgrade us，What's the logic? Here we give a review provided by a rating agency。We have four types of evaluation mechanisms：First，economic strength。second，institutional strength。third，financial strength。fourth，Risk sensitivity to emergencies。Our financial strength is a plus，But if you add the sensitivity to emergencies，The logic behind a country's governance capabilities is that the score may go down.。

these eight years，Many things have happened in our financial field，For example, there is a fiscal stimulus of 4 trillion yuan，Raising debt levels very quickly。2013money shortage、In the first year of Internet finance, interest rates once soared to 30%。stock market，Use every possible means，4000Just started，Next year，Thousand shares lower limit。real estate，2025annual stimulation，2025year blow，If we look back，A year of excitement，one year blow，A year of excitement，one year blow。

foreign exchange market，811Exchange rate reform，Falling all the way from 6.229，It's relatively stable now。foreign exchange reserves，We are heartbroken，According to calculations by our researchers，two years，Net decrease of $1.25 trillion，If we add in the past two years, our current account surplus is more than 500 billion，Nearly two trillion。

I'd say these things are enough of a headache in themselves.，But for the international，We don't have a clear explanation of why.，Everything can happen again。

Do it a little bit，Short of money again，Do it a little bit，The stock market stopped again，Do it a little bit，The currency market is gone，this matter，It is difficult for us to say that our governance capabilities are very strong，This is the stone from other mountains，Fortunately, the central government made wise decisions，This is a strict meeting，The financial work conference’s decision-making is unprecedentedly tough，So we declare war on high risk。2025end of year，The Central Economic Work Conference has clearly stated，We must put the prevention and control of financial risks in a more important position。

Financial security is an important component of national security and an important foundation for stable and healthy economic development.，financial activities，Economic activity，financial stability，Economic stability。This global financial conference，will rectify the financial system，Strengthening financial supervision and sailing financial risks。People often ask，Deleveraging itself is not easy to explain clearly，Where to go? What's the point? This time we have also identified three key points:：one，State-owned enterprises。two，local government。three，Dispose of non-performing assets。

First，State-owned enterprises are very powerful this time，Speaking of zombie companies，In other words, the problem of deleveraging，Deleverage within the enterprise sector，Mainly state-owned enterprises，And they are mainly zombie companies。The corresponding performance of zombie companies is non-performing assets.，So there is a question of who will pay for the bad assets?。As a national think tank, we，We are now working on these plans for relevant departments。second，This situation has been repeated repeatedly by local governments.，what to do?

Our traditional most effective means，The black gauze hat falls down，Lifelong Accountability，Do you still dare to do it? Back investigation responsibility。I noticed that many foreign institutions now，Take a look at this meeting in China，OK，This problem won't get worse。third，Risk treatment，Risk assets must be truly disclosed and disposed of in a timely manner。Not only that，One more trick，Thousands of tricks to deleverage，Can't control currency，They are all useless tricks。This sentence has already given us a preview of the future prospects。

We’ve all talked about strong credit stimulus before.，Strong government financing, etc.，control money and credit，We have clearly understood，Failure to control currency is a useless strategy。so，in the next few years，Tightening of monetary policy is the main trend，Moody's and S&P's forecasts are wrong。

Not only that，823rd of the month，State-owned enterprises deleveraged five times，一个国企，a local government，The local government's hat fell off，State-owned enterprises still need to solve the problem，Classification，You can take a look，I summarize the five most important ones here，The rules are still very real。Talked about finance，And talking more broadly about economics and finance，This financial work meeting，Black swan prevention，Also be wary of gray rhino。

What I understand is that everyone should find out all the current risk points for me.，Just turn a blind eye。ready to take some money，solve it。This measure，This is not possible in any country in the world。Final words，The conclusion is two comments，a review，International ratings downgrade China's sovereign credit rating，Really short-sighted。He ignored three things，One is that he overestimated the debt situation of China's local governments and state-owned enterprises，China’s leverage ratio is overestimated。

second，The one he used has been proven outdated by practice，And the same ruler with many flaws，to measure the situation in China，China is different from other countries。Our president Zhang Jun talked about this，China is different，Ignoring the resilience of the Chinese economy、toughness，ability and wisdom。

third，He doesn’t understand what socialist China is，Open the 19th National Congress，He will understand further，He ignored the party and government’s determination to deleverage，He ignores the potential of our country's governance capabilities。I think for international rating agencies，There should be comments like this。But conversely，We also have a piece of advice for ourselves，We must implement the spirit of the National Financial Work Conference，Reduce leverage，Prevent financial risks，This can't be done，Our previous criticism was blind criticism。

Finally, we concluded this meeting，Looking forward to five years，I think the next five years will mainly focus on dealing with risks，for longer-term growth in the future，lay the foundation，Thanks。

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