Caijing Magazine:
We know that actually the idea of a unified mix-business regulation framework has been floated for quite some time, and the People’s Bank of China has already set up a macro-potential regulation framework. So in your point of view, what is the most suitable model of regulation for the current development of the financial industry in China? And what kind of role will CBRC play in the future financial reform of the country? Thanks.
Guo Shuqing:
It’s very hard for me to answer your question since it’s only the third day for me to take this new appointment. I haven’t thought over this question yet because during the past four years, I have been working on the real economy. Last week, I was thinking about the industry transformation and upgrading in Shandong Province. For example, last year, 22 industrial transformation schemes have conducted mid-stage assessment; 23 schemes in the service industry are waiting for assessment this year; in agriculture, 46 kinds of products are ready to be assessed.
In 2016, we have completed 530,000 shantytown transformations; this year, 760,000 houses of shantytown transformation have been approved. In rural areas, we have to transform road, power, housing, toilet and other areas. Last year, we planned to transform 2 million toilets; but actually, we have finished 4.01 million. If you asked me what the most suitable model for toilet transformation is, I know it exactly; but if you asked me what the most suitable model of financial regulation is, I know nothing at present. I’m very sorry I can’t answer your question now. Thank you.
Dragon TV:
I have two questions. First is about real estate. Last year, the price of real estate in first- and second-tier cities grew extremely fast. Lots of prime lots appeared, most of which are reliant on bank loans. Mr. Guo, could you give us an introduction about how is the banking sector going to help alleviate the rising of house prices. And what will CBRC do to strengthen loan regulations coordinated with real estate control? Thanks.
Guo Shuqing:
Real estate finance is an important part. Currently, 1/4 of bank loans go to real estate market. Last year, 45 percent of new bank loans went to the real estate market. We are highly alert to a property-value bubble, and will do related research very seriously.
However, the most significant characteristic of the real estate market is the huge difference between different places. Different cities have to face different kinds of property bubble and risks. Therefore, in the financial regulation field, we hope banks will stand on actual reality and invest capital in real estate steadily and cautiously, including both towards individuals and property developers. Several years ago residents used to buy houses using their own deposit or by borrowing money from relatives and friends. In recent years, people like to rely on bank loans to buy houses. Last year, nearly half of the new bank loans were real estate loans, most of which are personal housing mortgage loans. Generally speaking, personal loans are not a huge proportion, and its leverage ratio is not high, but we have to pay close attention to the trend.
Wang Zhaoxing:
China’s real estate market is an emerging market featuring rapid growth, which made great contributions to Chinese economy, fiscal levies, as well as capital and profit growth of Chinese banks. As for real estate credit policy, we insist on a differentiated policy. We will limit those real estate loans containing bubbles and speculation, and destock some loans in third- and forth-tier cities. During the process of urbanization, housing demand especially rigid demand is also the loan demand which could improve people’s housing conditions and needs to be supported. By doing so, it will not only promote the real estate market to develop healthily and steadily, but also assure bank loans are safer.
