英文摘要

《财经》杂志   

2020年05月25日 09:34  

本文3786字,约5分钟

China to Adopt Monetary Policy to Ensure Economic Recovery; Fiscal Policy in 2020 Will Be More Active; Fiscal Policy in 2020 Will Be More Active; The Reform of Unemployment Insurance System Is Called Upon

China to Adopt Monetary Policy to Ensure Economic Recovery

On the eve of the “two sessions” in 2020, in the face of the severe impact of the epidemic, people were discussing how to coordinate fiscal and monetary policies. The discussion on “monetization of fiscal deficit” is quite popular. The proposal involves the evaluation of the proper role and positioning of China’s monetary policy and their role in stimulating economic recovery and stabilizing growth.

However, “monetization of fiscal deficits” is not allowed by China’s relevant laws. This legal requirement stems from the summary of China’s heavy historical lessons and is also the result of learning from hundreds of years of monetary policy practiced in Western countries. Some industry insiders pointed out that China’s monetary policy has gone onto a unique road compared to other countries’ practice of limitless QE and negative interest rates and domestic interest rate cut expectations. A person close to the monetary authority told Caijing that China will adopt a regular monetary policy, and this situation should be cherished.

 

Fiscal Policy in 2020 Will Be More Active

The impact of the global pandemic is superimposed on the downturn risks of the economy. In 2020, China’s economic growth is facing serious difficulties, and business operations are difficult. The Chinese government has increased the magnitude of macroeconomic policy adjustment. On May 22, 2020, in the delivered government work report, Premier Li Keqiang stated that it is necessary to fully estimate the impact of the epidemic on the world economy, intensify macroeconomic policy adjustment and its implementation, focus on stabilizing the economy for the sake of protecting people’s livelihood, and prevent short-term shocks from deteriorating into long-term recessions. According to the government work report, the scale of China’s government bond issue will exceed 8.5 trillion yuan in 2020. In addition, the scale of tax and fee reductions will reach 2.5 trillion yuan.

Under the epidemic, enterprises, as the main players in the market, are the first to be impacted. Based on such practical needs, fiscal policy in 2020 will be more active to hedge downward pressure on the economy.

 

Going Short Does Not Guarantee Profits

In the second half of 2019, a Shanghai-based fund company is considering buying in Luckin Coffee on a long position. Judging from their investigation, this fund suspected that Luckin was involved in data fraud. But this investment institution did not choose to go short, and this choice later turned out to be wise. Luckin publicly denied the accusation of financial fraud and its stock price continued to rebound. This caused short-selling institutions to suffer severe losses.

According to some investors, short selling can be a means of self-examination in the market, or a method of suppressing companies. Experienced investors believe that looking at historical data, shorting a company that does commit financial fraud is not necessarily a profitable business. We interviewed five experienced investors who invest in short positions, most of whom suffered heavy losses in April short trades. These short-loss accounts revealed a truth: the key to winning the market is not what you see, but what you believe in.

 

The Reform of Unemployment Insurance System Is Called Upon

Under the sweep of the ongoing global pandemic, businesses have been hit hard and unemployment has risen sharply. Unemployment insurance, which had not previously received much attention, has become a hot topic. China’s unemployment insurance fund has accumulated a total balance of 600 billion yuan. Some scholars proposed to use the unemployment insurance fund to help uninsured small and micro enterprises and unemployed people, trying to extend the benefits of the insurance to non-insured enterprises and individuals. These measures and proposals have surpassed pre-existing policies on unemployment insurance. Although these are just make-shift measures, they also raised the question of the reform of the unemployment insurance system.

It is not only necessary to establish an unemployment subsidy system, it is also feasible in reality. The establishment of this system can protect the rights of all insured persons, so that the unemployed will not lose their protected rights due to the high qualification threshold.