Yicai:

Recently, the financial data released by the central bank has shown a rapid decline in the growth rate of social financing. We have paid attention to the research reports issued by some securities companies, in which they believe that financing should be properly stimulated next year to resume growth. In your opinion, is the leverage ratio likely to stabilize and pick up next year? Thank you.

Liu Guoqiang:

Let me answer this question. In 2021, against the backdrop of scientific and effective pandemic prevention, remarkable results were achieved in stabilizing leverage and promoting growth. In 2021, China's macro leverage ratio was 272.5%, 7.7 percentage points lower than that at the end of 2020. If viewed from a quarterly perspective, the leverage ratio has declined for five consecutive quarters. There are both numerator and denominator factors that affect the macro leverage ratio. The numerator is the total debt, and the denominator is the gross domestic product (GDP). That is to say, the macro leverage ratio is total debt divided by GDP. In terms of the numerator, the total debt level was generally stable last year, while in terms of GDP as the denominator, it expanded significantly last year, and the growth rate is relatively fast. Especially compared with 2020, the GDP growth rate has accelerated significantly, which has a very prominent effect on reducing leverage. China's pandemic prevention and control are effective, the national economy continues to recover and development resilience continues to increase. When these factors are brought into play, GDP growth will be faster, the denominator will be larger and the macro leverage ratio will drop.

It is expected that the macro leverage ratio will remain basically stable in 2022. According to the Central Economic Work Conference, the economic work for 2022 should prioritize stability and seek progress while maintaining stability. Macroeconomic policies must be stable and effective to enhance developing the endogenous driving force. The current macro leverage ratio continues to decline, creating space for the financial system to increase support for MSBs, technological innovation and green development in the future. The decline in macro leverage over the five consecutive quarters has created room for future monetary policies, and, the lower the leverage, the greater the room. From an international perspective, China's pandemic prevention and control situation is relatively good, and economic growth is relatively resilient. It is expected that China's economic growth this year will still be faster than that of major developed economies. In this case, the denominator will remain relatively large, which will create conditions for better maintaining the macro leverage ratio in the future. We will adhere to systematic thinking, overall planning and coordination, base ourselves on serving high-quality economic development and implement cross-cycle monetary policy. Thank you.