China's financial system is generally sound and has the ability to defuse various risks, according to the central economic work conference. We should keep the macro leverage ratio basically stable and consolidate the responsibilities of all parties. The author believes that in the current new internal and external environment, stabilizing leverage and maintaining growth has become the goal of the next stage of China's economic work.

At present, our country economic stability in the positive, to the good trend has not changed for a long time, but also should realize soberly, our country is in the transformation of the mode of development, optimize the economic structure and transformation research period of growth dynamics, structural, institutional and periodic issues are intertwined, and "three phase superposition" influence continued to deepen, economic downward pressure. At this point, only vigorously deleveraging is obviously not enough to meet the demand for stable growth, and stabilizing leverage will help further stabilize the economy.

According to the trend of China's macro leverage ratio, although deleveraging started in 2015, China was in the stage of rapid growth of macro leverage ratio before 2017. On the one hand, the rapid growth of macro leverage ratio has promoted the growth rate and vitality of China's economic development, while on the other hand, the continuous growth of macro leverage ratio has also brought potential debt crisis and hidden dangers of systemic financial risks. In 2018, after several years of deleveraging, China's structural deleveraging has achieved remarkable results. However, with the increasing risks and challenges at home and abroad and the downward pressure on China's economy, the transition from deleveraging to stable leverage has become an irresistible trend.

According to the data of China's macro leverage ratio in the first three quarters of 2019, the three quarters achieved an increase of 5.1, 0.7 and 1.6, a total of 7.4 percentage points, respectively. Maintaining an upward trend is a feature of the macro leverage ratio in the current stage. The high macro leverage ratio in the first quarter also brought economic growth exceeding expectations. With the slowdown in the growth rate of macro leverage ratio in the second two quarters, China's economic growth slowed down gradually. However, macro leverage ratio needs to play a greater role in China's economic development in 2020.

Of course, on the premise that stability takes precedence, growth cannot be stabilized only by adding leverage. It is more important to maintain a dynamic balance between growth, leverage and risk prevention. From the perspective of structure, macro leverage ratio is mainly composed of four sectors, namely the resident sector, non-financial enterprise sector, government sector and financial sector. Therefore, it is reasonable to start from these four sectors to stabilize leverage. Look from the department of residents, mortgage and consumer credit is a key factor in rising leverage by the department of the early stage of the residents, in recent years as China adhere to the "room not fry" the basic orientation, increasingly strict regulation on the real estate market, as well as to the once savage growth of consumer credit tighter regulation, residents sector leverage growth declined slightly, the consumer has become the main driving force of economic growth in China, be sure to leverage the residents department put enough attention, to make it at a normal level, avoid excessive leverage produce extrusion effect on consumption.

The adjustment and control of non-financial enterprise sector leverage ratio should be the focus of the next stage of the work to stabilize leverage. As state-owned enterprises assume a large number of functions of maintaining steady growth and employment, it is easy to go up and down their leverage ratio in the context of soft financing constraints. In addition to the sluggish development of direct financing in China, it is natural for the leverage ratio of the real economy to remain high. In order to stabilize the leverage ratio of enterprises, we must start from the structural aspect, mainly through the leverage management of "zombie" state-owned enterprises and financing platforms. At the same time, we should vigorously develop direct financing, optimize the financing structure, and alleviate the financing difficulties and expensive problems faced by smes.

From deleveraging to stabilizing leverage, the most important change of macro leverage ratio for government departments is that corresponding changes need to be made at the institutional level. In the process from deleveraging to stabilizing, the government should take a more comprehensive consideration of the deficit to GDP ratio and local government hidden debt, so as to form effective institutional constraints in advance. Financial sector leverage decline significantly in recent years, bank off-balance sheet business shrinking significantly, considering the next stage of firm leverage work requirements, the bank credit also should make corresponding structural adjustment, the shrinkage of off-balance sheet business and shadow banking business at the same time, increase the intensity of credit support to small and medium enterprises, to correct the credit resources mismatch phenomenon, further improve the ability of financial services entity.

Source: China financial information net